Apollo Enterprises has been awarded an insurance settlement of $4,000 at the end of each 6 month period for the next 11 years. (Round your answers to the nearest cent.) (a) As the accountant, calculate how much (in $) the insurance company must set aside now at 6% interest compounded semiannually to pay this obligation to Apollo. 12214.71 (b) How much (in $) would the insurance company have to invest now if the Apollo settlement was changed to $2,000 at the end of each 3 month period for 11 years and the insurance company e interest compounded quarterly? $ 139005.31 x (c) How much (in $) would the insurance company have to invest now if the Apollo settlement was paid at the beginning of each 3 month period rather than at the end? $ INGOD

Apollo Enterprises has been awarded an insurance settlement of $4,000 at the end of each 6 month period for the next 11 years. (Round your answers to the nearest cent.) (a) As the accountant, calculate how much (in $) the insurance company must set aside now at 6% interest compounded semiannually to pay this obligation to Apollo. 12214.71 (b) How much (in $) would the insurance company have to invest now if the Apollo settlement was changed to $2,000 at the end of each 3 month period for 11 years and the insurance company e interest compounded quarterly? $ 139005.31 x (c) How much (in $) would the insurance company have to invest now if the Apollo settlement was paid at the beginning of each 3 month period rather than at the end? $ INGOD

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 12EA: Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank...

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McMasters Inc. specializes in BBQ accessories. In order for the company to expand its business, they take out a long-term loan in the amount of $800,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 9%. Each year on December 31, the company pays down the principal balance by $50,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.
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Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank in the amount of $500,000. The terms of the loan are 2.9% annual interest rate and payable in 8 months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on October 20, and the entry for payment of the short-term note and final interest payment on May 20. Round to the nearest cent if required.
Homeland Plus specializes in home goods and accessories. In order for the company to expand its business, the company takes out a long-term loan in the amount of $650,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 8.5%. Each year on December 31, the company pays down the principal balance by $80,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.
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