A company decides to obtain a small-business loan of $200,000. The financial institution from which the company borrows offers two options: a. Borrow $200,000 at 6% with monthly payments of $3,866.56 over 5 years. b. Borrow $200,000 at 7% with monthly payments of $2,322.17 over 10 years. Required: 1. Record the issuance of an installment note payable under each option. 2. Record the payments for the first and second month under each option. 3. Determine the total amount of interest paid under each option over the full period of the note. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Record the payments for the first and second month under each option. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your answers to 2 decimal places.)

A company decides to obtain a small-business loan of $200,000. The financial institution from which the company borrows offers two options: a. Borrow $200,000 at 6% with monthly payments of $3,866.56 over 5 years. b. Borrow $200,000 at 7% with monthly payments of $2,322.17 over 10 years. Required: 1. Record the issuance of an installment note payable under each option. 2. Record the payments for the first and second month under each option. 3. Determine the total amount of interest paid under each option over the full period of the note. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Record the payments for the first and second month under each option. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your answers to 2 decimal places.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 30P

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