Homework Quiz-2 - Name Section Homework Quiz2 1. You have...

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Name Section Homework Quiz—2 1. You have the following information for ABC Company’s three-year, zero coupon note payable: note issued on September 1, 2010, effective interest rate is 5% with annual compounding assumed, the maturity amount of the note is $1,000,000 and the amount borrowed is $863,837.60. Required : in the space below prepare a note liability table for this zero coupon obligation; include appropriate column headings and row identifiers. 2. You have the following information for DEF Company’s five-year, 8% note payable: note issued on August 1, 2010. Date Interest Expense Cash Flow Change in Carrying Amount Carrying Amount 8/1/10 199,636 7/31/11 15,971 50,000 (34,029) 165,607 7/31/12 13,249 50,000 (36,751) 128,856 7/31/13 10,308 50,000 (39,692) 89,164 7/31/14 7,133 50,000 (42,867) 46,297 7/31/15 3,704 50,000 (46,296) 1* *round off 1
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2a : In the space below write DEF’s entry for 8/1/10 2b : In the space below write DEF’s entry for 12/31/10 2c : In the space below write DEF’s entry for 7/31/11 2
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This note was uploaded on 01/31/2011 for the course MGMT 351 taught by Professor Staff during the Spring '08 term at Purdue University-West Lafayette.

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Homework Quiz-2 - Name Section Homework Quiz2 1. You have...

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