Homework Answers
| Market rate | Initial cash proceeds | PV Factor | Amount of annual payment | |||
| (a) | 4.00% | $ 430,000 | / | 4.4518 | = | $ 96,590.14 |
| (b) | 6.00% | $ 430,000 | / | 4.2124 | = | $ 102,079.57 |
| (c) | 8.00% | $ 430,000 | / | 3.9927 | = | $ 107,696.55 |
- The present value of annual payments should equal the initial proceeds from the loan.
- $430,000 is the present value of annual payments, i.e. present value of annuity.
- Present value of annuity = Annuity × PVAF
- i.e. Annuity = Present value of annuity ÷ PVAF
- PVAF = Present value of annuity factor.
Add Answer to:
Murray Company borrows $430,000 cash from a bank and in return signs an installment note for...
On January 1, 2018, MM Co. borrows $330,000 cash from a bank and in return signs...
On January 1, 2018, MM Co. borrows $330,000 cash from a bank and in return signs an 4% installment note for five annual payments of $74,127 each, with the first payment due one year after the note is signed. 1. Prepare the journal entry to record issuance of the note 2. For the first $74127 annual payment at December 31, 2018, what amount goes toward interest expense? What amount goes toward principal reduction of the note? & Answer is complete...
On January 1, MM Co. borrows $350,000 cash from a bank and in return signs an...
On January 1, MM Co. borrows
$350,000 cash from a bank and in return signs an 4% installment
note for five annual payments of $78,619 each. 1. Prepare the
journal entry to record issuance of the note. 2. For the first
$78,619 annual payment at December 31, what amount goes toward
interest expense? What amount goes toward principal reduction of
the note?
On January 1, MM Co. borrows $350,000 cash from a bank and in return signs an 4% installment...
On November 1, 2019, Norwood borrows $590,000 cash from a bank by signing a five-year installment note bearing 7% interest.
On November 1, 2019, Norwood borrows $590,000 cash from a bank by signing a five-year installment note bearing 7% interest. The note requires equal payments of $143,895 each year on October 31. Required: 1. Complete an amortization table for this installment note. 2. Prepare the journal entries in which Norwood records the following: (a) Accrued interest as of December 31, 2019 (the end of its annual reporting period). (b) The first annual payment on the note.
On November 1, 2019, Norwood borrows $590,000 cash from a bank by signing a five-year installment...
On November 1, 2019, Norwood borrows $590,000 cash from a bank by signing a five-year installment note bearing 7% interest. The note requires equal payments of $143,895 each year on October 31. Required: 1. Complete an amortization table for this installment note. 2. Prepare the journal entries in which Norwood records the following: (a) Accrued interest as of December 31, 2019 (the end of its annual reporting period). (b) The first annual payment on the note.
On November 1, 2018, Norwood borrows $440,000 cash from a bank by signing a five-year installment...
On November 1, 2018, Norwood borrows $440,000 cash from a bank by signing a five-year installment note bearing 7% interest. The note requires equal payments of $107,312 each year on October 31. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) Required: 1. Complete an amortization table for this installment note. 2. Prepare the journal entries in which Norwood records the following: (a) Accrued interest as of December 31, 2018 (the end of...
On November 1, 2017, Norwood borrows $510,000 cash from a bank by signing a five-year installment...
On November 1, 2017, Norwood borrows $510,000 cash from a bank by signing a five-year installment note bearing 9% interest. The note requires equal payments of $131,116 each year on October 31. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) Required: 1. Complete an amortization table for this installment note. 2. Prepare the journal entries in which Norwood records the following: (a) Accrued interest as of December 31, 2017 (the end of...
On November 1, 2018, Norwood borrows $470,000 cash from a bank by signing a five-year installment...
On November 1, 2018, Norwood borrows $470,000 cash from a bank by signing a five-year installment note bearing 6% interest. The note requires equal payments of $111,575 each year on October 31. Table B1, Table B 2. Table B. 3, and Table B4) (Use appropriate factor(s) from the tables provided.) Required: 1. Complete an amortization table for this installment note. 2. Prepare the journal entries in which Norwood records the following: (a) Accrued interest as of December 31, 2018 (the...
On November 1, 2017, Norwood borrows $520,000 cash from a bank by signing a five-year installment...
On November 1, 2017, Norwood borrows $520,000 cash from a bank by signing a five-year installment note bearing 6% interest. The note requires equal payments of $123,445 each year on October 31. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) Required: 1. Complete an amortization table for this installment note. 2. Prepare the journal entries in which Norwood records the following: (a) Accrued interest as of December 31, 2017 (the end of...
On November 1, 2017, Norwood borrows $560,000 cash from a bank by signing a five-year installment...
On November 1, 2017, Norwood borrows $560,000 cash from a bank by signing a five-year installment note bearing 9% interest. The note requires equal payments of $143,970 each year on October 31. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) Required: 1. Complete an amortization table for this installment note. 2. Prepare the journal entries in which Norwood records the following: (a) Accrued interest as of December 31, 2017 (the end of...
On November 1, 2018, Norwood borrows $570,000 cash from a bank by signing a five-year installment...
On November 1, 2018, Norwood borrows $570,000 cash from a bank by signing a five-year installment note bearing 6% interest. The note requires equal payments of $135,315 each year on October 31. (Table B1, Table B.2. Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) Required: 1. Complete an amortization table for this installment note. 2Prepare the journal entries in which Norwood records the following: (a) Accrued interest as of December 31, 2018 (the end of its...
On January 1, 2018, MM Co. borrows $330,000 cash from a bank and in return signs an 4% installment note for five annual payments of $74,127 each, with the first payment due one year after the note is signed. 1. Prepare the journal entry to record issuance of the note 2. For the first $74127 annual payment at December 31, 2018, what amount goes toward interest expense? What amount goes toward principal reduction of the note? & Answer is complete...
On January 1, MM Co. borrows
$350,000 cash from a bank and in return signs an 4% installment
note for five annual payments of $78,619 each. 1. Prepare the
journal entry to record issuance of the note. 2. For the first
$78,619 annual payment at December 31, what amount goes toward
interest expense? What amount goes toward principal reduction of
the note?
On January 1, MM Co. borrows $350,000 cash from a bank and in return signs an 4% installment...
On November 1, 2019, Norwood borrows $590,000 cash from a bank by signing a five-year installment note bearing 7% interest. The note requires equal payments of $143,895 each year on October 31. Required: 1. Complete an amortization table for this installment note. 2. Prepare the journal entries in which Norwood records the following: (a) Accrued interest as of December 31, 2019 (the end of its annual reporting period). (b) The first annual payment on the note.
On November 1, 2018, Norwood borrows $470,000 cash from a bank by signing a five-year installment note bearing 6% interest. The note requires equal payments of $111,575 each year on October 31. Table B1, Table B 2. Table B. 3, and Table B4) (Use appropriate factor(s) from the tables provided.) Required: 1. Complete an amortization table for this installment note. 2. Prepare the journal entries in which Norwood records the following: (a) Accrued interest as of December 31, 2018 (the...
On November 1, 2017, Norwood borrows $560,000 cash from a bank by signing a five-year installment note bearing 9% interest. The note requires equal payments of $143,970 each year on October 31. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) Required: 1. Complete an amortization table for this installment note. 2. Prepare the journal entries in which Norwood records the following: (a) Accrued interest as of December 31, 2017 (the end of...
On November 1, 2018, Norwood borrows $570,000 cash from a bank by signing a five-year installment note bearing 6% interest. The note requires equal payments of $135,315 each year on October 31. (Table B1, Table B.2. Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) Required: 1. Complete an amortization table for this installment note. 2Prepare the journal entries in which Norwood records the following: (a) Accrued interest as of December 31, 2018 (the end of its...
Most questions answered within 3 hours.
-
You have just been hired by the EPA to help with the new gas
mileage standards...
asked 36 minutes ago -
4) A firm is hit by increases in its wage rate, w.
a) How does this...
asked 51 minutes ago -
A square current loop 5.4 cm on each side carries a 510 mA
current. The loop...
asked 3 hours ago -
What are five tips in conducting knowledge assessment/literature
review research? Each of these tips needs to...
asked 3 hours ago -
Antigen presenting cells link innate and adaptive immune
responses. In the theoretical scenario where phagosomes cannot...
asked 3 hours ago -
Dealing with conflict, in my opinion, is a skill and an art. I
believe that those...
asked 4 hours ago -
6. A long straight wire with circular cross section and radius
1.5 cm carries a 1.2...
asked 4 hours ago -
Deacon Corporation has provided the following financial data
from its balance sheet and income statement:
Year...
asked 5 hours ago -
List and discuss at least three variables from everyday life for
which you expect the variable ...
asked 5 hours ago -
A high-pass filter consists of a 1.60 μF capacitor in series
with a 125 Ω resistor....
asked 5 hours ago -
A newly developed artificial intelligence has trouble
distinguishing hand-written numbers from hand-written alphabets.
There are pictures...
asked 5 hours ago -
The carbonate ion CO3 2- has multiple resonance structures.
a. Draw them and assign the hybridization...
asked 5 hours ago