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Accounting for Notes Payable (b)

Accounting for Notes Payable (b) - $ How much Cash would...

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Accounting for Notes Payable: [103F250b] Evan Company needs to borrow $1,300,000 on June 30, Year 1. The firm needs to decide between two different repayment plans: Plan 1 would require quarterly payments for six years starting one quarter after June 30, Year 1, and Plan 2 would require semi- annual payments for five years starting six months after June 30, Year 1. The Plan 1 loan would be fully repaid after six years with the last payment occurring on June 30, Year 7. The Plan 2 loan would be fully repaid after five years with the last payment occurring on June 30, Year 6. The interest rate in both repayment plans is 12%.
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Unformatted text preview: $__________ How much Cash would Evan have to pay out each quarter under Plan 1 [quarterly payments]? Place your answer in the Answer Book to receive credit for your work. [15 points] $__________ How much Cash would Evan have to pay out in Year 2 under Plan 2 [semi-annual payments]? Place your answer in the Answer Book to receive credit for your work. [15 points] $__________ How much Interest Expense would Evan recognize on September 30, Year 2, when making its fifth quarterly payment under the terms of Plan 1? Place your answer in the Answer Book to receive credit for your work. [15 points]...
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