Answered

Get the answers you need at Westonci.ca, where our expert community is dedicated to providing you with accurate information. Experience the convenience of getting accurate answers to your questions from a dedicated community of professionals. Get quick and reliable solutions to your questions from a community of experienced experts on our platform.

On January 1, 2021, the Merit Group issued to its bank a $38 million, five-year installment note to be paid in five equal payments at the end of each year. Installment payments of $9.417 million annually include interest at the rate of 7.6%.
Required: What would be the amount(s) related to the note that Merit would report in its statement of cash flows for the year ended December 31, 2021?

Sagot :

Cricetus

Answer:

The correct solution is provided below.

Explanation:

Given:

The cash inflow,

= $38

Interest rate,

= 7.6%

or,

= 0.076

Now,

The annually interest will be:

= [tex]38\times 0.076\times 1[/tex]

= [tex]2.89[/tex] ($)

Or,

The installment payment without interest will be:

= [tex]9.417-2.89[/tex]

= [tex]6.53[/tex] ($)

We appreciate your time. Please revisit us for more reliable answers to any questions you may have. We hope our answers were useful. Return anytime for more information and answers to any other questions you have. Westonci.ca is your trusted source for answers. Visit us again to find more information on diverse topics.