..il AT&T; Wi-Fi 8:17 PM @ * 95%- ezto.mheducation.com connect. Ant Chagter 10 H

Question

..il AT&T; Wi-Fi 8:17 PM @ * 95%- ezto.mheducation.com connect. Ant Chagter 10 Hoew 2.50 peinis Dan Dayle started a business by issuing an $100,000 face value note to First State Bank on January 1, 2016. The note had an 8 percent annual rate of interest and a five-year term. Payments of $25,046 are to be made each December 31 for five years. Required what portion of the December 31, 2016, payment is applied to interest expense and principal? b What is the principal balance on January 1, 2017? What portion of the December 31, 2017, payment is applied to interest expense and principal? (Round your answers to the nearest dollar amount.) References B&Resoures;

Explanation / Answer

We need to prepare a schedule as prepared below to answer all the questions.

a.

b. Principal Balance on Jan 1, 2017 - $66,363

c.

Accounting Period Principal Balance as on Jan 1 Payment Applied to Interest Applied to Principal (Column 2 *.08) (Column 3 - Column 4) 2016 80,000 20,037 6,400 13,637 2017 66,363 (80000-13637) 20,037 5,309 14,728 2018 51,635 (66363-14728) 20,037 4,131 15,906 2019 35,729 (51635 - 15906) 20,037 2,858 17,179 2020 18,550 (35729 - 17179) 20,037 1,484 18,550

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