On January 1, 2024, ABC Company borrowed $182,000 from the bank. The loan requires annual payments of $25,200 every December 31, beginning December 31, 2024. Assume the loan has an interest rate of 10% compounded annually. Calculate the amount of the note payable at December 31, 2025 that would be classified as a current liability.
Beginning Loan balance |
Interest Expense |
Cash paid |
Principal paid |
Ending Loan balance |
|
[A] |
[B = A x 10%] |
[C] |
[D = C - B] |
[E = A - D] |
|
01-Jan-24 |
$182,000 |
||||
31-Dec-24 |
$182,000 |
$18,200 |
$25,200 |
$7,000 |
$175,000 |
31-Dec-25 |
$175,000 |
$17,500 |
$25,200 |
$7,700 |
$167,300 |
31-Dec-26 |
$167,300 |
$16,730 |
$25,200 |
$8,470 |
$158,830 |
Amount of the note payable at December 31, 2025 that would be classified as a current liability = $ 8,470
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