Milton Company borrowed $95,000 on January 1, 2020, by signing a 6%promissory note. The note is to be repaid in full by December 31, 2025. OnDecember 31 of each year, Milton makes one payment on the installment notecomprising blended interest and principal components. The amortization schedulefor the note is presented below. Milton has a March 31 year-end. The company doesnot make monthly adjustments, but rather makes adjusting entries every quarter.Beginning NotePayableInterest Expense Repaid Principal onNote PayableEnding NotePayableYear(6%)202095,0005,70013,61981,38166,94414,43715,303202181,3814,88351,64135,420202266,9444,017202351,6413,09816,221202435,4202,12517,19418,22618,226(0)202518,2261,094Assuming the company makes the required annual payments on December 31, usethe amortization schedule to determine the following answers:DO NOT use dollar signs ($) or commas (.) in your responses, just simply type thenumber with no formatting (I.e 10000). Round all answers to the nearest dollar:(a) the amount of the annual payment(b) the amount of Interest Expense on this note to report in the year ended March31, 2020$4(c) the amount of Interest Expense to report in the year ended March 31, 2022t) $(d) the total interest and total principal paid over the note's entire life

The question is based on the concept of Financial Accounting.

Milton Company borrowed $95,000 on January 1, 2020, by signing a 6% promissory note. The note is to be repaid in full by December 31, 2025. On December 31 of each year, Milton makes one payment on the installment note comprising blended interest and principal components. The amortization schedule for the note is presented below. Milton has a March 31 year-end. The company does not make monthly adjustments, but rather makes adjusting entries every quarter. Beginning Note Payable Interest Expense Repaid Principal on (6%) Ending Note Payable Year Note Payable 5,700 4,883 81,381 66,944 51,641 2020 95,000 13,619 14,437 15,303 2021 81,381 2022 66,944 4,017 2023 51,641 3,098 16,221 35,420 17 194 18 226

Milton Company borrowed $95,000 on January 1, 2020, by signing a 6% promissory note. The note is to be repaid in full by December 31, 2025. On December 31 of each year, Milton makes one payment on the installment note comprising blended interest and principal components. The amortization schedule for the note is presented below. Milton has a March 31 year-end. The company does not make monthly adjustments, but rather makes adjusting entries every quarter. Beginning Note Payable Interest Expense Repaid Principal on (6%) Ending Note Payable Year Note Payable 5,700 4,883 81,381 66,944 51,641 2020 95,000 13,619 14,437 15,303 2021 81,381 2022 66,944 4,017 2023 51,641 3,098 16,221 35,420 17 194 18 226

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter14: Long-term Liabilities: Bonds And Notes

Section: Chapter Questions

Problem 11E

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