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Do not enter $ signs and do not round until you get to the final answer....

Do not enter $ signs and do not round until you get to the final answer. Answer as a whole number.

1. Assume on December 1, 2017, a company borrows funds to purchase equipment. The company will make the following principal payments: 2018, $5,100 2019, $3,280 2020, $2,280 2021, $1,570 On December 31, 2019, the total lliabilities will be $______

2. Pearson Co issue its $62,500 at a price of 103, the stated rate is 8%, the bond term is 4 years, and the market rate is 5%. Assume the term of the bonds is 4 years. Using the straight line method of amortization, the interest expense in the 1st year will be $_____

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Answer #1

1)ANSWER IS $3,850.

Total liabilities will the payment to be made in the year 2020 and 2021 ie, $2,280 + $1,570 = $3,850.

Year 2019 amount will be paid the year itself.

2)ANSWER IS $2,731.

If you have any doubts please comment on the answer.

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