Dan Dayle started a business by issuing an $98,000 face value note to First State Bank on January 1, Year 1. The note had a 8 percentannual rate of interest and a five-year term. Payments of $24,545 are to be made each December 31 for five years.Required:a. What portion of the December 31, Year 1, payment is applied to interest expense and principal?b. What is the principal balance on January 1, Year 2?c. What portion of the December 31, Year 2, payment is applied to interest expense and principal?Note: Round your answers to the nearest dollar amount.a. Interest expensea. Principalb.Principal balancec. Interest expensec.Principal

a) Interest Expense = Principal Amount x Interest Rate = $98,000 x 8% = $7,840a) Principal…

Answered: Dan Dayle started a business by issuing…

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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Similar questions

On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.
Jain Enterprises honors a short-term note payable. Principal on the note is $425,000, with an annual interest rate of 3.5%, due in 6 months. What journal entry is created when Jain honors the note?
On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank. The note has a face value of 15,000 and a maturity value (principal plus interest) of 15,400. The discount is calculated to be 385, and the accrued interest income is 100. The recourse liability is estimated to be 1,000. Prepare the journal entry of Phillips to record the sale of the note receivable.
On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan. Refer to RE6-10. On December 31, Jordan Inc. received 50,000 on assigned accounts. Prepare Jordans journal entries to record the cash receipt and the payment to McLaughlin.
A customer was unable to pay the accounts receivable on time in the amount of $34,000. The customer was able to negotiate with the company and transferred the accounts receivable into a note that includes interest, along with an up-front cash payment of $6,000. The note maturity date is 24 months with a 15% annual interest rate. What is the entry to recognize this transfer?
Dan Dayle started a business by issuing an $92,000 face value note to First State Bank on January 1, Year 1. The note had a 7 percent annual rate of interest and a five-year term Payments of $22,438 are to be made each December 31 for five years. Required: a. What portion of the December 31, Year 1. payment is applied to interest expense and principal? b. What is the principal balance on January 1, Year 2? c. What portion of the December 31, Year 2, payment is applied to interest expense and principal? Note: Round your answers to the nearest dollar amount. a. Interest expense a. Principal b. Principal balance c. Interest expense c. Principal
Dan Dayle started a business by issuing an $85,000 face value note to First State Bank on January 1, Year 1. The note had an 7 percent annual rate of interest and a five-year term. Payments of $20,731 are to be made each December 31 for five years. Required What portion of the December 31, Year 1, payment is applied to interest expense and principal? What is the principal balance on January 1, Year 2? What portion of the December 31, Year 2, payment is applied to interest expense and principal? (Round your answers to the nearest dollar amount.) Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Leach Company borrowed $95,000 cash by issuing a note payable on June 1, Year 1. The note had an 6 percent annual rate of interest and a one-year term to maturity. Required: a. What amount of interest expense will Leach recognize for the year ending December 31, Year 1? b. Record the issue of notes payable and recognition of interest on December 31, Year 1, in the accounting equation for Year 1. c. What amount of cash will Leach pay for interest expense in Year 1? d. What is the amount of interest payable as of December 31, Year 1? e. What amount of cash will Leach pay for interest expense in Year 2? f. What amount of interest expense will Leach recognize in Year 2? g. What is the amount of interest payable as of December 31, Year 2? -

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