Question

Pharmaceutical Dispensary borrowed $ 630 comma 000 on January​ 2, 2018​, by issuing a 15 % serial bond payable that must be paid in three equal annual installments plus interest for the year. The first payment of principal and interest comes due January​ 2, 2019. Complete the missing information. Assume bonds are issued at face value

Answer 1

$273 ,000 being the equal  installments for  all the three years

Explanation:

I year interest  = $ 630,000 ×15÷100 = 94,500

$I year interest = 630,000 ×15÷100 = 94,500$

II year interest = $420,000×15÷100 =  63,000

$II year interest = 420,000×15÷100 = 63,000$

III year interest = $210 ,000×15÷100 =  31,500

$III year interest = 210 ,000×15÷100 = 31,500$

Total interest = 94,500+63,000+31,500 = 189.000

$Total interest = 94,500+63,000+31,500 = 189.000$

Installments payment with interest for each year is=

(630,000 + 189,000 = 819,000÷ 3 = 273,000)

$(630,000 + 189,000 = 819,000÷ 3 = 273,000)$

  = $273 ,000 being the equal  installments for  all the three years