Question

An installment note payable for a principal amount of $94,000 at 6% interest requires Lawson Company to repay the principal and interest in equal annual payments of $22,315 beginning December 31, of the first year, for each of the next five years. After the final payment, the carrying amount on the note will be a.$22,315 b.$21,053 c.$1 d.$1,263

Answer 1

Answer:

$ 0

Explanation:

Year Opening balance Interest Repayment Closing balance

1              94000           5640    22315            77325

2              77325           4640    22315            59650

3              59650            3579    22315            40913

4              40913             2455    22315             21053

5               21053            1262     22315                0

hence, after final payment the carrying amount is $ 0