Question

Shamrock Farms Ltd. needed financing to buy two John Deere tractors. Shamrock receives $250,000 on December 31, 2021, when it issues a 10-year, 6% note payable. The terms provide for semi-annual blended instalment payments on June 30 and December 31 in the amount of $16,804.00.

Collapse question part (a) Prepare an instalment payment schedule for the first four interest periods. (Round answers to 2 decimal places, e.g. 5,276.25.)

SHAMROCK FARMS LTD. Instalment Payment Schedule - Blended Payments

Interest Period Cash Payment Interest Expense Reduction of Principal Principal Balance

Dec. 31, 2021

June 30, 2022

Dec. 31, 2022

June 30, 2023

Dec. 31, 2023

Answer 1

Notes:
Par value of the notes =	250000
interest Rate =	6%
Half yearly interest rate = 6 % /2 =	3%
Solution:
REPAYMENT SCHEDULE OF NOTE PAYABLE
Interest Period	Cash Payment	Interest Expenses @ 3 % On Principal Balance	Reduction of Principal Balance	Principal Balance
Dec 31, 2021				$      2,50,000.00
June 30, 2022	$             16,804.00	$                          7,500.00	$           9,304.00	$      2,40,696.00
Dec 31, 2022	$             16,804.00	$                          7,220.88	$           9,583.12	$      2,31,112.88
June 30, 2023	$             16,804.00	$                          6,933.39	$           9,870.61	$      2,21,242.27
Dec 31, 2023	$             16,804.00	$                          6,637.27	$         10,166.73	$      2,11,075.54
Totals	$             67,216.00	$                        28,291.54	$         38,924.46