c Seoure https://newoonrectmheducation.com:How/connect.html Ch10 Ex 10-10 Help S
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c Seoure https://newoonrectmheducation.com:How/connect.html Ch10 Ex 10-10 Help Save&Exit; Submit Check my work Exercise 10-10 Installment note with equal total payments LO C1 On lar!uary 1, 2017 Eagle borrows$22000 cash by signing a faur-year. 6% installment note The rate requires four equal total payments of accrued interest and principal on December 31 of each year from 201 through 2020 able B1. lable B2 JableB3, and Tahir R 4 Use appropriate factor(s) from the tables provided.) Prepare an amortization table tor this installment note. INI 1B) ID) Leginning Debit Interest Deblt Noes Credit Cash Date 22.000 2015Explanation / Answer
Calculation of equal install amount
P.V of future cash inflows @ 6% = $22,000
Annuity factor @ 6% for 4 years = 3.465
Equal instalment amount = 22,000/3.465 = $6,349
(A)
(B) = (A)*6%
(C) = (A+B)
(D) = equal instalment calculated above
(E) = (C-D)
Period
Beginning balance
Interest expense
(Beginning balance *6%)
Notes payable
cash credit
Ending balance
2015
$22,000.00
$1,320.00
$23,320.00
$6,349.00
$16,971.00
2016
$16,971.00
$1,018.26
$17,989.26
$6,349.00
$11,640.26
2017
$11,640.26
$698.42
$12,338.68
$6,349.00
$5,989.68
2018
$5,989.68
$359.38
$6,349.06
$6,349.00
$0.06
Total
$3,396.06
$25,396.00
Calculation of equal install amount
P.V of future cash inflows @ 6% = $22,000
Annuity factor @ 6% for 4 years = 3.465
Equal instalment amount = 22,000/3.465 = $6,349
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