Question

Sandhill Inc. developed a new sales gimmick to help sell its inventory of new automobiles. Because many new car buyers need financing, Sandhill offered a low downpayment and low car payments for the first year after purchase. It believes that this promotion will bring in some new buyers. On January 1, 2017, a customer purchased a new $32,200 automobile, making a downpayment of $1,400. The customer signed a note indicating that the annual rate of interest would be 8% and that quarterly payments would be made over 3 years. For the first year, Sandhill required a $385 quarterly payment to be made on April 1, July 1, October 1, and January 2018. After this one-year period, the customer was required to make regular quarterly payments that would pay off the loan as of January 1, 2020 Prepare a note amortization schedule for the first year. (Round answers to 0 decimal places, e.g. 38,548.) Cash Paid Interest Expense Discount Amortized Carrying Amount of Note Date

Answer 1