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3 years ago

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On april 12, hong company agrees to accept a 60-day, 10%, $4,500 note from indigo company to extend the due date on an overdue a

ccount. what is the journal entry that indigo company would make, when it records payment of the note on the maturity date? (use 360 days a year.)

1 answer:

zzz [600]3 years ago

6 0

<span>Total interest due = [ $ 4,500 x 0.10 x (60/360) ] = $ 75</span>

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We know,

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Therefore, putting the value in the formula, we can get,

$B_{0} = [128 * \frac{1 - (1 + 0.061)^{-7}}{0.061}] + [\frac{2,000}{(1 + 0.061)^7}]$

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