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Use the following to answer questions 20 – 24 On January 1, year 1, JT borrows $41,000 to purchase a new vehicle by agreeing to a 3.0%, 6-year loan with the bank. Payments are due at the end of each month with the first installment (vehicle payment) due on January 31, year 1. ROUND YOUR ANSWERS TO THE NEAREST CENT. 20. Determine the monthly vehicle payment (installment) $ 21. Determine the interest expense for the first car payment $ 22. How much of the payment will decrease the amount owed (principal)? $. 23. After the first vehicle payment is made the amount owed on the vehicle would be: $ 24. Determine interest expense for the second car payment $

Use the following to answer questions 20 – 24 On January 1, year 1, JT borrows $41,000 to purchase a new vehicle by agreeing to a 3.0%, 6-year loan with the bank. Payments are due at the end of each month with the first installment (vehicle payment) due on January 31, year 1. ROUND YOUR ANSWERS TO THE NEAREST CENT. 20. Determine the monthly vehicle payment (installment) $ 21. Determine the interest expense for the first car payment $ 22. How much of the payment will decrease the amount owed (principal)? $. 23. After the first vehicle payment is made the amount owed on the vehicle would be: $ 24. Determine interest expense for the second car payment $

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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What the answer for 12, 16,22 12. It’s not 40,447.70 16. It’s not 100,775.94 22. It’s not 44,851.73
Use the following to answer questions 20 – 24 On January 1, year 1, JT borrows $41,000 to purchase a new vehicle by agreeing to a 3.0%, 6-year loan with the bank. Payments are due at the end of each month with the first installment (vehicle payment) due on January 31, year 1. ROUND YOUR ANSWERS TO THE NEAREST CENT. 20. Determine the monthly vehicle payment (installment) $ 21. Determine the interest expense for the first car payment $ 22. How much of the payment will decrease the amount owed (principal)? $ 23. After the first vehicle payment is made the amount owed on the vehicle would be: $ 24. Determine interest expense for the second car payment $
Transcribed Image Text:Use the following to answer questions 20 – 24 On January 1, year 1, JT borrows $41,000 to purchase a new vehicle by agreeing to a 3.0%, 6-year loan with the bank. Payments are due at the end of each month with the first installment (vehicle payment) due on January 31, year 1. ROUND YOUR ANSWERS TO THE NEAREST CENT. 20. Determine the monthly vehicle payment (installment) $ 21. Determine the interest expense for the first car payment $ 22. How much of the payment will decrease the amount owed (principal)? $ 23. After the first vehicle payment is made the amount owed on the vehicle would be: $ 24. Determine interest expense for the second car payment $
Use the following to answer questions 11 – 15 AL issues 4.0%, 20-year bonds with a face amount of $1,000,000 for $986,529.23. The market interest rate for bonds of similar risk and maturity is 4.1%. Interest is paid annually. 11. $ Determine the interest раyment. 12. $ (rounded to nearest dollar). Determine interest expense for the first interest раyment. 13. What will happen to interest expense each interest payment? (Increase, decrease, remain constant) What will happen to the bond liability (carrying value) each interest payment? (Increase, decrease, remain constant). 14. 15. $ How much will the company pay out when the bonds mature in 20 years (assume all interest payments have already been paid)? 16. $ (rounded to nearest dollar) A ten year bond issue with a face amount of $100,000 bears interest at the rate of 5.0%. The current market rate of interest is 4.90%. Determine the issue price of this annual bond.
Transcribed Image Text:Use the following to answer questions 11 – 15 AL issues 4.0%, 20-year bonds with a face amount of $1,000,000 for $986,529.23. The market interest rate for bonds of similar risk and maturity is 4.1%. Interest is paid annually. 11. $ Determine the interest раyment. 12. $ (rounded to nearest dollar). Determine interest expense for the first interest раyment. 13. What will happen to interest expense each interest payment? (Increase, decrease, remain constant) What will happen to the bond liability (carrying value) each interest payment? (Increase, decrease, remain constant). 14. 15. $ How much will the company pay out when the bonds mature in 20 years (assume all interest payments have already been paid)? 16. $ (rounded to nearest dollar) A ten year bond issue with a face amount of $100,000 bears interest at the rate of 5.0%. The current market rate of interest is 4.90%. Determine the issue price of this annual bond.
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