On January 1, 2021, Texas Inc. obtained a $50,000, four-year, 7% installment note from Arkansas Bank....

On January 1, 2021, Texas Inc. obtained a $50,000, four-year, 7% installment note from Arkansas Bank. The note requires four annual payments of $14,761, beginning on December 31, 2021. The portion of the Notes Payable that would be included in the current liability section of Texas’s balance sheet at December 31, 2021, after the first payment is made would be:

A) $35,239

B) $38,739

C) $12,049

D) $14,761

Expert Solution

Total Loan amount	$50,000

Date	Principal	Interest	Annual payment	Closing amount
31-Dec-21	50,000	3,500	14,761	38,739
31-Dec-22	38,739	2,712	14,761	26,690
31-Dec-23	26,690	1,868	14,761	13,797
31-Dec-24	13,797	966	14,761	-

Total Amount outstanding as on 31 Dec 2021	38,739
Principal amount paid in Year ended 31 Dec 2022	= annual installment amount - (Interest amount paid)
	= 14761-2712
	= $12049
Texas’s balance sheet at December 31, 2021
Current portion	= $12049

Non Current Portion	= 38739-12049
	= $26690

So Answer is (C ) $12049

ekkarill92 answered 2 years ago

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