Compute the interst expense


Response to the following problem:

On February 11, 2011, Wilmar Corporation borrowed $100,000 from its bank by signing a 12 percent, 15-year note payable. The note calls for 180 monthly payments of $1,200. Each payment includes an interest and a principal component.

a. Compute the interst expense in February.

b. Compute the protion of Wilmar's March 31, 2011, $1,200 payment that will be applied to the principal of the note.

c. Compute the carrying value of the note on April 30, 2011 (round to the nearest dollar).

 

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Cost Accounting: Compute the interst expense
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