dan dayle ( )Connect link MWF 230p3/DChapter tio lesofdifferent typnAr OneStop A
ID: 2518031 • Letter: D
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dan dayle ( )Connect link MWF 230p3/DChapter tio lesofdifferent typnAr OneStop AustinpeayStax .> C | ? ezto.mheducation.com/hm.tpx 10-Homework × connect ACCOUNTING Chapter 10-Homework Question 2 (of 2) velue 2.00 points Dan Dayle started a business by issuing an $84,000 face value note to First State Bank on January 1, 2016. The note had an 6 percent annual rate of interest and a five-year term. Payments of $19,941 are to be made each December 31 for five years Required a. What portion of the December 31, 2016, payment is applied to interest expense and principal? Interest expense Principal b. What is the principal balance on January 1,2017? Principal bala c. What portion of the December 31 2017 paymentis applied to interest expense and principal? (Round your answers to the nearest dollar amount.) nterest expense PrincipalExplanation / Answer
Annual interest expense = Book value of note * Interest rate
= 84000* 0.06
= 5050
Annual payment = 19941
Principle = 19941 – 5050 = $14891
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Principle balance = 84000 – 14891 = 69109
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Interest amount in 2017 = 69109* 0.06 = 4146.54
Principle year = 19941 – 4146.54 = 15794.46
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