On January 1, 2021, a company borrowed $500,000 from a local bank by issuing an 8% note due in four years. The bank requires the company to make annual installment payments of $150,960.40 each December 31 over the four years.Required:(a) Complete the amortization schedule for the four-year loan, (b) record the issuance of the note, and record the (c) first annual installment payment and (d) second annual installment payment. How would your answers change if the company borrowed only $400,000 at 6% for four years?

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A:

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A:

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A:

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A:

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A: The question is based on the concept of Financial Accounting.

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Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.