Question

Martinez Inc. developed a new sales gimmick to help sell its inventory of new automobiles. Because many new car buyers need financing, Martinez 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, 2020, a customer purchased a new $35,000 automobile, making a downpayment of $1,000. 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, Martinez required a $425 quarterly payment to be made on April 1, July 1, October 1, and January 1, 2021. After this one-year period, the customer was required to make regular quarterly payments that would pay off the loan as of January 1, 2023.

Prepare a note amortization schedule for the first year. (Round answers to 0 decimal places, e.g. 38,548.)

Date		Cash Paid		Interest Expense		Discount Amortized		Carrying Amount of Note
1/1/20		$		$		$		$
4/1/20
7/1/20
10/1/20
1/1/21

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Incorrect answer iconYour answer is incorrect.

Indicate the amount the customer owes on the contract at the end of the first year. (Round answer to 0 decimal places, e.g. 38,548.)

The customer owes on the contract at the end of the first year

$

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Incorrect answer iconYour answer is incorrect.

Compute the amount of the new quarterly payments. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.)

The new quarterly payments

$

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Incorrect answer iconYour answer is incorrect.

Prepare a note amortization schedule for these new payments for the next 2 years. (Round answers to 0 decimal places, e.g. 38,548.)

Date		Cash Paid		Interest Expense		Discount Amortized		Carrying Amount of Note
1/1/21		$		$		$		$
4/1/21
7/1/21
10/1/21
1/1/22
4/1/22
7/1/22
10/1/22
1/1/23

Answer 1

Anscoer Page No O @ Nobe amortization achedule for the finat Carh paid $ 425 on li| a0 35000 -1000 Carorying amourt of note $ 34000 Prevican carrying Int er esf amount of note X a% expense intenest expense Cash paid Discount amortized amount of note - discoont - antiaed Revioos carrying Carrying note of amount amo Date discount amos tized Caryi ng amount gfnote Cash paid nteresf expense $34000 (4 355) ($ 260-1) 4)1|20 425 $680 $ 34255 |키1120| $4 a5 $ 685 1 $ 34515.| $ 690.302 ($265 302) 10li120 $425 34480. 402 ,!11/21$425 $ 695.608 (4270.608) $35051.01 Castomen acoes on he contach at end * t yean 9, 505 -0) The costomer owes on the contiact at end of fvat gean - $ 3

© Neo quentealy payment No (2) No. of years , n 8%. 2%. Naw quarterly payment $ 3505/·01 1- (i+2%)-8 2% 3505 1.0| -4784.81 7.32548144 quartadly poyment a * The neu $ 4 184. 81 O Note amorti zation schedule for these neuw paymenh for neut a Cash paid Dat e Tnterest expense Distount amorliged Carrying amount gfrite $ 35051.01 411121 44 484·8) 701.02 $ 30967 22 $4083.49 *|1121 $4484.8) $ 4165.44 $ 26801-45 619.34 10121 $4784.8) 5 36. 04 $4248.77 $ 22550.98 451·06 11/22 $4784.81 $ 4333.15 $ 18219.23 411122$478481 $ 13498.80 $ 4420.43 364.38 4/1/22 $448481 f 4508.83 275.98 $ 9889.97 $ 4599.01 $ 4691 185.80 10/1/22$478y.81 40 123/44484.81 $ 4691 9:3.82

Page. NO Po above , Cash paid - $4 484.8/ note previous valuex2% Interest am ount of Courying experme Dibcount amostigedc cash paid - interest expense amount Revious carrying discount amortized Cavrying amount of nete