Question

On January 1, 2024, ABC Company borrowed $150,000 from the bank. The loan requires semi-annual payments of $18,000 every June 30 and December 31, beginning June 30, 2024. Assume the loan has an interest rate of 20% compounded semi-annually.

Calculate the amount of the note payable at December 31, 2024 that would be classified as a current liability.

Answer 1

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ABC Company
Loam amortization Schedule	A	B	C=A*20%/2	D=B-C	E=A-D
Date	Opening Balance of loan	Installment paid	Interest expense	Principle portion	Outstanding Balance of loan
June 30 2004	150,000.00	18,000.00	15,000.00	3,000.00	147,000.00
Dec 31 2004	147,000.00	18,000.00	14,700.00	3,300.00	143,700.00
June 30 2005	143,700.00	18,000.00	14,370.00	3,630.00	140,070.00
Dec 31 2005	140,070.00	18,000.00	14,007.00	3,993.00	136,077.00
Total for 2005			28,377.00	7,623.00

Current liability of loan payable is that portion which is payable within 1 year. So here amount payable within 2005 is current liability. So,

Current liability for loan payable is $ 28,377.

Current liability for interest payable is $ 7,623.

Total Current liability is $ 36,000.