Interest portion of each annual payment


If a company borrows money from a bank as an installment note, the interest portion of each annual payment will:

1. equal the interest rate on the note times the carrying amount of the note at the beginning of the period.

2. remain constant over the term of the note.

3. equal the interest rate on the note times the face amount.

4. increase over the term of the note.

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Accounting Basics: Interest portion of each annual payment
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