Question

Sunland Company borrowed $1650000 from BankTwo on January 1, 2019 in order to expand its mining...

Sunland Company borrowed $1650000 from BankTwo on January 1, 2019 in order to expand its mining capabilities. The 5-year note required annual payments of $429720 and carried an annual interest rate of 9.5%. What is the balance in the notes payable account at December 31, 2020 after the annual payment?

Homework Answers

Answer #1

--Balance in the notes payable account at December 31, 2020 after the annual payment = $ 1,078,128

--Working

Date Beginning balance Interest Expense Annual Payment Principal paid Ending balance
01-Jan-19 $1,650,000
31-Dec-19 $1,650,000 $156,750 $429,720 $272,970 $1,377,030
31-Dec-20 $1,377,030 $130,818 $429,720 $298,902 $1,078,128

--

Beginning balance Interest Expense Annual Payment Principal paid Ending balance
1650000
=+F10521 =1650000*9.5% 429720 =429720-156750 =1650000-272970
1377030 =1377030*9.5% 429720 =429720-130818 =1377030-298902
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