On 1/1/19, Lantana Loan Co., a calendar-year company, accepts a 5%, $500,000 three-year loan that pays interest semi-annually on 6/30 and 12/31 from Diamond Distributors, when the market rate of interest was 10%. In exchange for the note, Diamond agrees to make semi-annual Interest payments and repay the full $500,000 at maturity. Complete the amortization table for this note, then complete all journal entries for 2019. Answer: Beginning note balance is calculated using Excel PV function with the following inputs: Amortization Table:

On 1/1/19, Lantana Loan Co., a calendar-year company, accepts a 5%, $500,000 three-year loan that pays interest semi-annually on 6/30 and 12/31 from Diamond Distributors, when the market rate of interest was 10%. In exchange for the note, Diamond agrees to make semi-annual Interest payments and repay the full $500,000 at maturity. Complete the amortization table for this note, then complete all journal entries for 2019. Answer: Beginning note balance is calculated using Excel PV function with the following inputs: Amortization Table:

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 16P

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