Tim Company borrowed $150,000 from a local bank on January 1, 2019.The loan is a...

Tim Company borrowed $150,000 from a local bank on January 1, 2019.
The loan is a 5-year note payable that requires semi-annual payments
of $24,000 every June 30 and December 31, beginning June 30, 2019.
Assume the loan has a 20% interest rate, compounded semi-annually.

Calculate the amount of the note payable at December 31, 2019 that
would be classified as a long-term liability.

Expert Solution

January 1, 2019
Amount Borrowed	150,000.00
Period (Years)	5.00
No. of Payments in a year	2.00
Amount of Payments	24,000.00

Amount Paid on 30 June, 2019	24,000.00
Amount Paid on 31 Dec, 2019	24,000.00
Remaining Balance as on 31 Dec, 2019	102,000.00	A

Current Maturities i.e. amount to be paid within next year
Amount Payable on 30 June, 2020	24,000.00
Amount Payable on 31 Dec, 2020	24,000.00
Total	48,000.00	B

The amount of the note payable that would be classified as a long-term liability:			54,000.00	C=A-B

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