On January 1, 2009, American Eagle borrows $90,000 cash by signing a four-year, 5% installment note. The note requires four equal total payments of accrued interest and principal on December 31 of each year from 2009 through 2012.
Requirement 1:
Compute the amount of each of the four equal total payments. Use the present value Table B.3.
Requirement 2:
Prepare an amortization table for this installment note like the one in Exhibit 10.14.