On January 1, Year 1, Zero Company obtained a $52,000, four-year, 6.5% installment note from Regional Bank. The note requires annual payments of $15,179, beginningon December 31, Year 1. The December 31, Year 2 carrying amount in the amortization table for this installment note will be equal to)a. $26,000b. $21,642Oc. $28,402Od. $27,635

The person who promised to pay the specified amount by signing a note is treated as notes payable as…

Answered: The December 31, Year 2 carrying amount…

Business

Accounting

The December 31, Year 2 carrying amount in the amortization table for this installment note will be equal to

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Q5.
On January 1, 2019, Northern Manufacturing Company bought a piece of equipment by signing a non-interest-bearing $80,000, 1-year note. The face value of the note includes th price of the equipment and the interest. The effective interest rate is an annual rate of 16%, and the note is to be paid in four $20,000 quarterly installments on March 31, June 30, September 30，and December 31. The price of the equipment is the present value of the four payments discounted at the effective interest rate. 1. Prepare all journal entries to record the preceding information. Present value techniques should be used. 2. If Northern’s financial statements were issued on June 30, 2019, what amount would the company report as notes payable?
A debtor firm’s 12/31/21 statement of financial position is to be issued of 4/15/22. A long-term obligation contracted in 2019 for settlement on 1/15/22 was extinguished through cash payment on its due date. On 1/20/22, a 5-year note was issued to replace the cash used up for the payment made on 1/15/22. Which of the following statements is correct? Group of answer choices The original obligation should be reported in the 2021 statement of financial position as a current liability because the entity does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. The new obligation entered into on 1/20/22 should be reported in the 2022 statement of financial position as a non-current liability because it is due to be settled beyond twelve months after the reporting period. The original obligation should be reported in the 2022 statement of financial position as a non-current liability because the entity does have an…
The following amortization schedule indicates the interest and principal to be repaid on an installment note established January 1, 2021, for a company with a March 31 fiscal year-end. Period 1/1-12/31, Year 1 Interest Expense on Notes Payable $ 560 424 #TITT 286 144 1,414 1/1-12/31, Year 2 1/1-12/31, Year 3 1/1-12/31, Year 4 Total Beginning Notes Payable $ 28,000 21, 207 14, 278 Repaid Principal Ending Notes 7,210 $ 6,793 6,929 7,068 7,210 28,000 Payable $ 21,207 14,278 7,210 Required: 1. Assuming the company makes the required annual payments on December 31, use the amortization schedule to determine (a) the amount of the (rounded) annual payment; (b) the amount of Interest Expense to report in the year ended March 31, 2021; (c) the amount of Interest Expense to report in the year ended March 31, 2022; (d) the Notes Payable balance at January 1, 2024; and (e) the total interest and total principal paid over the note's entire life 2. Assuming the company makes adjustments at the end…
1
The debt in the table below is retired by the sinking fund method. Interest payments on the debt are made at the end of each payment interval and the payments the sinking fund are made at the same time. Determine the following (a) the size of the periodic interest expense of the debt, (b) the size of the periodic payment into the sinking fund, (c) the periodic cost of the debt, (d) the book value of the debt at the time indicated. Debt Principal $19,000 Term of debt 10 years Payment Interval Interest Rate on Debt Interest Rate on Fund Conversion Period 3 months 6.5% 7% quarterly Book Value Required After 8 years (a) The size of the periodic interest expense is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
16. On October 1, 2020, Zachary's Balloons borrowed S4,000 on a 12%, one-year note payable. Interest was payable semiannually. A correct adjusting entry was made on December 31, 2020, and a correct reversing entry was made on January 1, 2021. The entry that should be made on March 31, 2021, is a. Interest Payable 240 Cash 240 b. Interest Expense Interest Payable 120 120 Cash 240 c. Interest Expense 240 Cash 240 d. Interest Expense 120 Cash 120
Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] On January 1, 2021, Eagle Company borrows $31,000 cash by signing a four-year, 8% installment note. The note requires four equal payments of $9,360, consisting of accrued interest and principal on December 31 of each year from 2021 through 2024. Exercise 10-12 (Algo) Installment note amortization table LO C1 Prepare an amortization table for this installment note. (Round all amounts to the nearest whole dollar.) Payments Period Ending (A) Beginning (B) Debit Interest (C) Debit Notes Balance Expense Payable Date 2021 2022 2023 2024 Total $ 0
Assume that on September 1, 2022, Brannigan, which has a year-end of December 31, borrows $120,000,000 on a three-year, 7%note. The note requires annual interest payments and repayment ofthe principal plus the final year's interest at the end of the thirdyear.Even though no payment is due on December 31, interest must beaccrued for the period
On January 1, 2020, Entity A issues a debt instrument for a price of P1,250,000. The principal amount is P1,250,000 and the debt instrument is repayable on December 31, 2024. The rate of interest is specified in the debt agreement as a percentage of the principal amount as follows: 6% in 2020, 8% in 2021, 10% in 2022, 12% in 2023, and 16.4% in 2024. The interest expense to be recognized in 2020 is
Eve Corporation issues a $9,000,000, 5%, 20-year mortgage note payable on December 31, 2019, to obtain needed financing for the construction of a building addition. The terms provide for annual installment payments of $578,818 on December 31. Will the amount of principal reduction in the second installment payment be more or less than with the first installment payment?
On November 30, 2023, Calla Resources Ltd. borrowed $180,000 from a bank by signing a four-year installment note bearing interest at 8%. The terms of the note require equal payments each year on November 30, starting November 30, 2024. Use TABLE 14A 2 (Use appropriate factor(s) from the tables provided.) Required: 1. Calculate the size of each installment payment. (Do not round intermediate calculations. Round the final answer to the nearest whole dollar.) Payment "T" 2. Complete an installment note amortization schedule for this note. (Do not round intermediate calculations. Round the final answers to the nearest whole dollar. Enter all the amounts as positive values.) Period Ending Beginning Balance Period Interest Expense Payments Debit Notes Payable Credit Cash Ending Balance