Monday, January 18, 2021

Camp Elim obtains a $125,000, 6%, five-year loan for a new camp bus on January 1, 2021. What amount will be recorded for interest expense for the first month's

Camp Elim obtains a $125,000, 6%, five-year loan for a new camp bus on January 1, 2021. What amount will be recorded for interest expense for the first month's payment on January 31, 2021?



A) $625

B) $125

C) $7,500

D) $1,000


Answer: A


Camp Elim obtains a $125,000, 6%, five-year loan for a new camp bus on January 1, 2021. If the monthly payment is $2,416.60, by how much will the carrying value decrease when the first payment is made on January 31, 2021?


A) $1,791.60

B) $625.00

C) $2,416.60

D) $1,000.60


Answer: A


A company issues a $200,000, 5%, six-year note on January 1, 2021. What amount will be recorded for interest expense for the first month's payment on January 31, 2021?



A) $1,000.00

B) $138.89

C) $833.33

D) $694.44


Answer: C

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