On january 1, 2016 Charles Jemison borrows $40000 from his father to open a business ....
On january 1, 2016 Charles Jemison borrows $40000 from his father to open a business . Charles is the beneficiary of a trust created by his aunt from which he will receive $25000 on january 1 2016 . He signs an agreement to make this amount payable to his father and, further ,to pay his father equal annual amounts from january 1, 2017 to january 1, 2025 , inclusive , in retirement of the debt. Interest is 12% per year
Homework Answers
Total amount pending to be paid by Charles to his father=$40000-$25000=$15000
From 2017 to 2025 ,9 instalments have to be made at $1667 per instalments
Calculation of interest on outstanding balance of debt
| Date | Instalments | Outstanding | Interest payment |
| Jan 1 2017 | 1667 | 15000 | 15000*12/100=1800 |
| Jan 1 2018 | 1667 | 15000-1667=13333 | 1600 |
| Jan 1 2019 | 1667 | 13333-1667=11666 | 1400 |
| Jan 1 2020 | 1667 | 11666-1667=9999 | 1200 |
| Jan 1 2021 | 1667 | 9999-1667=8332 | 1000 |
| Jan 1 2022 | 1667 | 8332-1667=6665 | 800 |
| Jan 1 2023 | 1667 | 6665-1667=4998 | 600 |
| Jan 1 2024 | 1667 | 4998-1667=3331 | 400 |
| Jan 1 2025 | 1664 | 3331-1667=1664 | 200 |
Total payment
| Years | Total payment |
| 2017 | 1667+1800=3467 |
| 2018 | 1667+1600=3267 |
| 2019 | 3067 |
| 2020 | 2867 |
| 2021 | 2667 |
| 2022 | 2467 |
| 2023 | 2267 |
| 2024 | 2067 |
| 2025 | 1864 |
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On january 1, 2016 Charles Jemison borrows $40000 from
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1, 2016, in San Diego, California, to be operated as a partnership.
Gray and Stone will serve as the senior partners because of their
years of experience. To establish the business, Gray, Stone, and
Lawson contribute cash and other properties valued at $420,000,
$390,000, and $195,000, respectively. An articles of partnership
agreement is drawn up. It has the following stipulations:
Personal drawings are allowed annually up to an amount equal...
l Gray, Stone, and Lawson open an accounting practice on January 1, 2016 in San Diego, California, to be operated as...
l
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