Campus Flights takes out a bank loan in the amount of $210,000 on March 1. The terms of the loan include a repayment of principal in ten equal installments, paid annually from March 1. The annual interest rate on the loan is 9 percent, recognized onDecember 31.A. Compute the interest recognized as of December 31 in year 1.B. Compute the principal due in year 1.

Interest recognized as of December 31 = Loan amount * rate * Fraction of the year

Answered: Campus Flights takes out a bank loan in…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 1EA: Campus Flights takes out a bank loan in the amount of $200,500 on March 1. The terms of the loan...

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Campus Flights takes out a bank loan in the amount of $210,000 on March 1. The terms of the loan include a repayment of principal in ten equal installments, paid annually from March 1. The annual interest rate on the loan is 9 percent, recognized on December 31 A. Compute the interest recognized as of December 31 in year 1. $15,750 ✓✔ B. Compute the principal due in year 1.

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