Question

3. Beta bought a computer at a cost of $ 45,000. To finance the purchase, she signed a promissory note that requires six equal annual payments. Beta will make the first payment in a year. Each payment will be in the amount of $ 10,637.
to. Determine the interest rate on this note.
b. Prepare the wage entries Beta will do for the first payment and for the last payment.
c. Suppose that immediately after making the third payment, Beta refinances and signs a new three-year note for the amount owed on the first note and the interest rate is 7.5%, how much will be the annual payment on the new note.

4. Suppose the note from the previous fiscal year carries an interest rate of 9% and Beta will pay $ 8,500 per year over the six years of the note. At the end of year 6, in addition to the $ 8,500, Beta will pay an additional amount to pay off the promissory note.
1) What additional amount will Beta have to pay to pay off the promissory note?
2) How much will Beta owe after making the third annual payment?
3) What is the wage entry for the seventh payment, including the amount calculated in question (1)?

Answer 1

cost of entries for first & lout payment Answers page: 0 a) Interest rate on the note a computer $45000 1 st installment $10637 Amount to be paid for 6 installments: 10637 x6 = $ 63822 Interest ¢ 63822 - $45000 $18822 Formula for rate + interest (interest x100) / (principal x time) (f 18822 X 100)|( 45000 x 6) 1882200) 270000 b) Wage 16.99-12 last in wage entry for 1st payment purchase Account debit & 10637 cash $ 10637 wage entry for last payment Bills payable account debit = $10637 cash $10637 c) Annual payment a new note Aften ist payment remaining amount to be paid 45000-410637 = $ 34363 The Slemaining amount is paid in 3 installment interest = 7.5.1. Amount of interest after 3 years ( 343634 7.543) |100 = $7731.67 Total amount paid after 3 years # 3436377731,67 $ 42094.67 paid for each installment +42094.6713 =1$ 14031.55 Το To rate of Amount