On July 15, when the prime rate was set at 3.5%, Canadian Footwear took out an operating loan from CIBC for $9,750.00 atprime plus 1.75%. The terms of the loan require a fixed payment of $1,790.00 on the 15th of every month until the loan isrepaid. The prime rate climbed by 0.5% on September 26.Complete the repayment schedule below by filling in the appropriate interest rates.DateBalance Annualbefore InterestTransaction RateNumber Interest Accruedof Days Charged InterestPayment(+) orAdvancePrincipalAmountBalance afterTransaction(-)Jul 15Aug 15$9,750.00$9,750.009631/365Sep 15$8,003.475% 31/365Sep 26$6,249.16Oct 15$6,249.1628%11/365$9.89% 19/365$18.70Nov 15$4,487.75%31/365$21.92$43.47$35.69 $35.69$9.89$28.59$21.92$43.47$1,790.00 $1,746.53$8,003.47$1,790.00 $1,754.31$6,249.16$0.00$1,790.00 $1,761.41$0.00$6,249.16$4,487.75Dec 15$2,719.67%30/365$12.85Jan 15$942.52%31/365$4.60$1,790.00 $1,768.08$12.85 $1,790.00 $1,777.15$4.60$2,719.67$942.52$947.12 $942.52$0.00

1. August 15: - Balance before transaction: $9,750.00 - Annual interest rate: 3.5% - Number of…

Answered: On July 15, when the prime rate was set…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 21MC: A customer takes out a loan of $130,000 on January 1, with a maturity date of 36 months, and an...

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delta corporation obtained a $45, 000 loan at a rate of prime +1.15% on July 18. Fixed payments of $3500 are due on the 25th of each month, beginning August 25. The prime rate was 3.85% on july 18 and rose to 4% on september 6. What is the outstanding loan balance immediately after the september 25th payment?(use 365 days a year. Do not round immediate calculations. Round your final answer to 2 decimal places.)
On July 15, when the prime rate was set at 4.25%, Canadian Footwear took out an operating loan from CIBC for $9,000.00 at prime plus 1.75%. The terms of the loan require a fixed payment of $1,690.00 on the 15th of every month until the loan is repaid. The prime rate climbed by 0.25% on September 21. Complete the repayment schedule below by filling in the appropriate interest rates. Date Jul 15 Aug 15 Sep 15 Sep 21 Oct 15 Nov 15 Dec 15 Jan 15 Balance before Transaction $9,000.00 $7,355.86 $5,703.34 $5,703,34 $4,042.41 $2,373.87 $696.06 Annual Interest Rate * * * * * $45.86 $37.48 $5.63 24/365 $23.44 31/365 $21.46 % 30/365 $12,19 31/365 % % % % % Number Interest Accrued of Days Charged Interest % 31/365 31/365 6/365 Payment (+) or Principal Advance Amount (-) $45.86 $1,690.00 $1,644,14 $37.48 $1,690.00 $1.652.52 $5.63 $0.00 $0.00 $1,690.00 $1,660.93 $29.07 $21.46 $1,690.00 $1,668.54 $1,690.00 $1,677.81 $699.75 $696.06 $12.19 $3.69 $3,69 Balance after Transaction $9,000.00 $7,355.86…
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On January 1, 2022, Strive Bank loaned P2,000,000 to Strike Company. Under the loan agreement, the loan interest rate is 10% and that Strike Company is to pay interest on the loan annually every December 31 starting December 31, 2022. The loan will mature on December 31, 2026.On December 31, 2022, Strive Bank has determined that there is a slight increase in the credit risk of the loan, therefore needs to measure the 12-month expected credit loss for the loan. The bank determined that the probability of the loan being in default over the next 12 months is 1% and that 20% of the principal amount will be lost over the term of the loan. On December 31, 2023, the bank has determined that there is a significant increase in the credit risk of the loan. The probability of the loan being in default over the life of the loan is 10% and that 25% of the principal amount will be lost over the term of the loan. During 2024, the company began to face financial difficulties. On December 31, 2024, the…
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Today is June 1. Sustainable Corporation has an obligation of $25 million coming due on August 1. The company is planning to borrow this amount on August 1 to fulfill its obligation, and plans to pay back the loan on December 1. The company’s borrowing rate is LIBOR + 125 basis points. The company’s bank presents it with the following LIBOR term structure: # days LIBOR 30 0.90% 60 1.00% 90 1.05% 120 1.10% 150 1.15% 180 1.18% 210 1.20% 240 1.21% For the calculation of interest, the bank assumes 30 days in a month, and 360 days in a year. Ms. Devro, the VP Finance of Sustainable, is worried that LIBOR will increase between June and August, thus increasing the company’s borrowing cost. She advises that the company enters into a forward rate agreement (FRA) with its bank to hedge its interest rate risk. She has asked you, the treasurer of the company, to present her with answers to the following questions: a. Should Sustainable…
ABC Company enters into an IRG arrangement with Ch-bank for a 9 months, P800,000 loan starting 3 months from now. The IRG rate is at 11% and the bank quotes a premium of P4,000. Compute for the effective interest rate if the actual interest rate 3 months from now is 8% . Show your solution.
A $7,650.00 demand loan was taken out on March 4 at a fixed interest rate of 7.7% with fixed monthly payments of $1,200.00. The first monthly payment is due April 4 and the 4th of every month thereafter. Prepare a full repayment schedule for the loan. (Round all monetary values to the nearest penny.) (Use a minus sign before the dollar sign to denote a negative monetary value. For example, "-$149.63".) (Give all "Number of Days" quantities as fractions with denominator 365.) Date Balance before Transaction Annual Interest Rate Number Interest Accrued of Days Charged Interest Payment (+) or Advance (-) Principal Balance after Amount Transaction Mar 4 $7,650.00 Apr 4 7.7% May 4 7.7% Jun 4 7.7% Jul 4 7.7% Aug 4 7.7% Sep 4 7.7% Oct 4 7.7%
A company takes out a six-year, $410,000 long-term loan on March 1. The interest rate on the loan is 4% per year, and blended payments of $6,415 (including both interest and principal) are to be made at the end of each month. The following is an extract from the loan amortization table the bank provided the company with: (a) -Your answer is partially correct. Determine the missing amounts. (Round answers to 0 decimal places, e.g. 125.) Payment 11 Payment 2 Payment 3: Payment 4 Beginning Loan Balance $410,000 404,952 399,887 395805 (5) Payment 6415 6,415 6,415 6,415 (1) Interest $1,367 1350 1,333 1316 (2) (6)

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