Question

On September 30, World Co. borrowed $1,000,000 on a 9% note payable. World paid the first of four quarterly payments of $264,200 when due on December 30. In its December 31 balance sheet, what amount should World report as note payable

Answer 1

Answer: $758,300

Explanation:

The total amount payable on December 30 is:

= Amount borrowed + interest

= 1,000,000 + (1,000,000 * 9%/4 quarters)

= $1,022,500

After the payment of $264,200, balance will be:

= 1,022,500 - 264,200

= $758,300