Question

Randy Industries purchased a supply of electronic components from Tomorrow Corporation on October 31,2021.In payment for the$1,000,000 million purchase, Randy industries issued a 1-year installment note to be paid in equal monthly payments of 94,180 at the end of each month.The payments include interest at the rate of 12%.What is the balance of notes payable on December 31, 2021 balance sheet?

Answer 1

$94,180 will be paid at the end of each month

Interest rate = 12%/12months

=1% per month

Month	Balance as on beginning of month	Rate of interest 1% per month [Beg. Bal *1%]	Installment paid	Principle Paid	Loan balance at the en of month [Bal at the beginning-principle paid]
November	$1,060,000	$10,600[$1,060,000*1%]	$94,180	$83,580[$94,180-10,600]	$976,420[$1,060,000-83,580]
December	$976,420	$9,764[$976,420*1%]	$94,180	$84,416[$94,180-9,764]	$892,004[$976,420-84,416]

Thus, .the balance of notes payable on December 31 is $892,004

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Answer 2

On December 31st , 2021

Principal outstanding on first December is 830798

Instalment paid every month is 94180

Interest to be paid is 8308 ( 830798*12%*1÷12)

Principal paid during December is 85875 (94180-8308)

Closing balance of principal at end of December is 744926 (830798-85875)

Answer 3

$94,180 will be paid at the end of each month

Interest rate = 12%/12months

=1% per month

Month	Balance as on beginning of month	Rate of interest 1% per month [Beg. Bal *1%]	Installment paid	Principle Paid	Loan balance at the en of month [Bal at the beginning-principle paid]
November	$1,000,000	$10,000[$1,000,000*1%]	$94,180	$84,180[$94,180-10,000]	$915,820[$1,000,000-84,180]
December	$915,820	$9,158[$915,820*1%]	$94,180	$85,022[$94,180-9,158]	$830,798[$915,820-85,022]

Thus, .the balance of notes payable on December 31 is $830,798

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