1. Beta bought a computer at a cost of $ 45,000. To finance the purchase, he...

1. Beta bought a computer at a cost of $ 45,000. To finance the purchase, he signed a five-year promissory note, which requires five equal annual payments. Beta will make the first payment in a year. Each payment will be in the amount of $ 12,795.
to.
a. Determine the interest rate on this note.
b. Prepare the wage entries Beta will do for the first payment and for the last payment.
c. Suppose that immediately after making the second payment, Beta refinances and signs a new three-year note for the amount owed on the first note and the interest rate is 10.25%, how much will be the annual payment on the new note.

2. Suppose the note from the previous year carries an interest rate of 12% and Beta will pay $ 10,000 annually over the five years of the note. At the end of year 5, in addition to the $ 10,000, Beta will pay an additional amount.
a) What additional amount will Beta have to pay to pay off the promissory note?
b) How much will Beta owe after making the third annual payment?
c) What is the wage entry for the fifth payment, including the amount calculated in question (a)?

Expert Solution

jeff jeffy answered 1 year ago

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