On January 1, 2020, a borrower signed a long-term note, face amount, $40,000; time to maturity, three years; stated rate of interest, 8%. The market rate of interest of 10% determined the cash received by the borrower. The note will be paid in three equal annual installments of $15,521 each December 31 (which is also the end of the accounting period for the borrower).
Required
a. Compute the cash received by the borrower and prepare a debt amortization schedule.
1. Compute the cash received by the borrower.
2. Prepare a debt amortization schedule.
On January 1, 2020, a borrower signed a long-term note, face amount, $40,000; time to maturity,...
On 1 January 20X9, a borrower signed a long-term note, face amount, $2,150,000; time to maturity, three years; stated rate of interest, 2%. The effective rate of interest of 6% determined the cash received by the borrower. The principal of the note will be paid at maturity; stated interest is due at the end of each year. (PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Compute the cash received...
Computing Installment Payment on Note Payable On January 1, 2020, a borrower signed a long-term note, face amount $90,000 with time to maturity of 6 years. The interest rate is 79 and equal annual installment payments will pay off the loan after six years. a. How much is each annual installment payment? • Note: Do not use a negative sign with your answer. • Note: Round your answer to the nearest whole dollar. $ 32,131 b. Record the first installment...
Question 4 Not complete Marked out of 50.00 P Flag question Recording Entries for an installment Note Payable On January 1, 2020, a borrower signed a long-term note, face amount, 540,000; time to maturity, three years; stated rate of interest, 8%. The market rate of interest of 10% determined the cash received by the borrower. The note will be paid in three equal annual installments of $15,521 each December 31 (which is also the end of the accounting period for...
On December 31, 2020, Sheffield Company signed a $1,186,300 note to Tamarisk Bank. The market interest rate at that time was 12%. The stated interest rate on the note was 10%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Sheffield’s financial situation worsened. On December 31, 2022, Tamarisk Bank determined that it was probable that the company would pay back only $711,780 of the principal at maturity. However, it was considered likely that interest would...
On December 31, 2020, Pharoah Company signed a $1,132,500 note to Novak Bank. The market interest rate at that time was 10%. The stated interest rate on the note was 8%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Pharoah’s financial situation worsened. On December 31, 2022, Novak Bank determined that it was probable that the company would pay back only $679,500 of the principal at maturity. However, it was considered likely that interest would...
On December 31, 2020, Ayayai Company signed a $1,061,900 note to
Pina Bank. The market interest rate at that time was 11%. The
stated interest rate on the note was 9%, payable annually. The note
matures in 5 years. Unfortunately, because of lower sales, Ayayai’s
financial situation worsened. On December 31, 2022, Pina Bank
determined that it was probable that the company would pay back
only $637,140 of the principal at maturity. However, it was
considered likely that interest would...
On December 31, 2020, Pharoah Company signed a $1,056,900 note
to Novak Bank. The market interest rate at that time was 10%. The
stated interest rate on the note was 8%, payable annually. The note
matures in 5 years. Unfortunately, because of lower sales,
Pharoah’s financial situation worsened. On December 31, 2022, Novak
Bank determined that it was probable that the company would pay
back only $634,140 of the principal at maturity. However, it was
considered likely that interest would...
On December 31, 2020, Headland Company signed a $1,132,500 note to Sage Bank. The market interest rate at that time was 10%. The stated interest rate on the note was 8%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Headland's financial situation worsened. On December 31, 2022, Sage Bank determined that it was probable that the company would pay back only $679,500 of the principal at maturity. However, it was considered likely that interest would...
Current Attempt in Progress On December 31, 2020, Vaughn Company signed a $1,105,800 note to Bramble Bank. The market interest rate at that time was 11%. The stated interest rate on the note was 9%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Vaughn's financial situation worsened. On December 31, 2022, Bramble Bank determined that it was probable that the company would pay back only $663,480 of the principal at maturity. However, it was considered...
On December 31, 2020, Nash Company signed a $1,284,300 note to Crane Bank. The market interest rate at that time was 12%. The stated interest rate on the note was 10%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Nash's financial situation worsened on December 31, 2022, Crane Bank determined that it was probable that the company would pay back only $770,580 of the principal at maturity. However, it was considered likely that interest would...