Recording Entries for an Installment Note Payable On January 1, 2020, a borrower signed a long-term note, face amount, $100,000; time to maturity, three years; stated rate of interest, 8%. The market rate of interest of 10% determined the cash received by the borrower. The note will be paid in three equal annual installments of $38,803 each December 31 (which is also the end of the accounting period for the borrower). Required a. Compute the cash received by the borrower and prepare a debt amortization schedule. • Note: Round your answer to the nearest whole dollar. 1. Compute the cash received by the borrower. $ 80,000 2. Prepare a debt amortization schedule.
Recording Entries for an Installment Note Payable On January 1, 2020, a borrower signed a long-term note, face amount, $100,000; time to maturity, three years; stated rate of interest, 8%. The market rate of interest of 10% determined the cash received by the borrower. The note will be paid in three equal annual installments of $38,803 each December 31 (which is also the end of the accounting period for the borrower). Required a. Compute the cash received by the borrower and prepare a debt amortization schedule. • Note: Round your answer to the nearest whole dollar. 1. Compute the cash received by the borrower. $ 80,000 2. Prepare a debt amortization schedule.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter9: Current Liabilities And Contingent Obligations
Section: Chapter Questions
Problem 6P: Non-Interest-Bearing Note Payable: Present Value On January 1, 2019, Northern Manufacturing Company...
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Transcribed Image Text:Recording Entries for an Installment Note Payable
On January 1, 2020, a borrower signed a long-term note, face amount, $100,000; time to maturity, three years; stated rate of interest, 8%. The market
rate of interest of 10% determined the cash received by the borrower. The note will be paid in three equal annual installments of $38,803 each
December 31 (which is also the end of the accounting period for the borrower).
Required
a. Compute the cash received by the borrower and prepare a debt amortization schedule.
Note: Round your answer to the nearest whole dollar.
1. Compute the cash received by the borrower.
$ 80,000
2. Prepare a debt amortization schedule.
Expert Solution
Step 1
Cash received by the borrower is the summation of the present value of all the installments to be paid on December 31.
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