Purchased equipment costing $15,608 by taking out a 4-month installment note with First Bank. The note will be paid back in four equal installments of $4,000 at the end of each month for four months. The interest rate on the note is 12% compounded monthly, and the first installment payment is due on December 31, 20X5. Interest calculations are rounded to the nearest whole month and whole dollar. The amortization schedule for this note is as follows: Date 12/1/X5 12/31/X5 1/30/X6 2/27/X6 3/31/X6 Totals Cash Paid Interest Expense 4,000 4,000 4,000 4,000 16,000 156 118 79 39 392 Reduction in CV 3,844 3,882 3,921 3,961 15,608 Carrying Value (CV) 15,608 11,764 7,882 3,961 0

Purchased equipment costing $15,608 by taking out a 4-month installment note with First Bank. The note will be paid back in four equal installments of $4,000 at the end of each month for four months. The interest rate on the note is 12% compounded monthly, and the first installment payment is due on December 31, 20X5. Interest calculations are rounded to the nearest whole month and whole dollar. The amortization schedule for this note is as follows: Date 12/1/X5 12/31/X5 1/30/X6 2/27/X6 3/31/X6 Totals Cash Paid Interest Expense 4,000 4,000 4,000 4,000 16,000 156 118 79 39 392 Reduction in CV 3,844 3,882 3,921 3,961 15,608 Carrying Value (CV) 15,608 11,764 7,882 3,961 0

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 1PB: Sub-Cinema Inc. borrowed $10,000 on Jan. 1 and will repay the loan with 12 equal payments made at...

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