COB 218 Chapter Notes - Chapter 10: Retained Earnings, Sinking Fund, Debenture
Document Summary
Loans that require payments of principal and interest at regular intervals are usually represented by. The terms of installment notes usually range from 2-5 years. Blair issued the bank a 5-year installment note with a 9% The loan agreement required blair to pay five equal installments of ,709 on 12/31 of each year from. When they pay the final installment, both the principal and interest will be paid in full: the interest expense (column d) is computed by multiplying the principal balance on jan. 1 (column, by the interest rate. For example, the principal repayment for 2016 is. ,709 - ,000= ,709; for 2017 it is ,709-,496=,213: the principal balance on dec. 31 (column f) is computed by subtracting the principal repayment (column e) from the principal balance on jan. 1 (column b). Dec. 31 for 2016 is ,000-,709=,291; on dec. 31, 2017 the principal balance is ,291-
