Question

Peachtree Company borrows $30,000 from the local bank at 7% interest. The term of the note is five years, and the annual payments remain constant at $7,317. Determine the interest expense Peachtree Company should record in the second year.

Answer 1

Answer:

Determine the interest expense Peachtree Company should record in the second year. $ 1734.83

Explanation:

Interest = balance x interest %

              =24783.28*7%

               =1734.83

Due Date" "Payment                Interest Principal Balance

                                      30.000,00

1 1/1/20 7.316,72   2.100,00 5.216,72 24.783,28

2 1/1/21 7.316,72   1.734,83 5.581,89 19.201,39

3 1/1/22 7.316,72   1.344,10 5.972,62 13.228,77

4 1/1/23 7.316,72   926,01 6.390,71 6.838,06

5 1/1/24 7.316,72   478,66 6.838,06 0,00