Accounting

On January 1, Harrison Enterprises borrowed $40,000 for three years. Harrison signed a noninterestbearing note. Assuming that the market rate of interest is 9 percent on the date the note is made and that interest is compounded annually, what is the face value of the note?

What is the amount of interest expense shown on the budgeted income statement for the first two years?

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Describe the cash inflows and outflows Harrison must plan for with this note.

On November 1, Turner Company borrowed $30,000. Turner signed a three-year installment note that calls for 12 quarterly payments and a 8 percent interest rate.

How much cash will Turner pay each quarter?

How much of the first payment will be interest expense and how much will be principal?

On April 1, Bailey Products borrowed $150,000 at 7 percent on a five-year installment loan. Annual payments are $36,583.60.

How much of the first payment is principal and how much is interest?

How much of the second payment is principal and how much is interest?

Describe the cash inflows and outflows associated with the note.

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