On January 1, Year 1, Zero Company obtained a $52,000, four-year, 6.5% installment note from Regional Bank. The note requires annual payments of $15,179, beginningon December 31, Year 1. The December 31, Year 2 carrying amount in the amortization table for this installment note will be equal to)a. $26,000b. $21,642Oc. $28,402Od. $27,635

The person who promised to pay the specified amount by signing a note is treated as notes payable as…

Answered: The December 31, Year 2 carrying amount…

Business

Accounting

The December 31, Year 2 carrying amount in the amortization table for this installment note will be equal to

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter14: Long-term Liabilities: Bonds And Notes

Section: Chapter Questions

Problem 11E

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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

On January 1, Year 1, Zero Company obtained a $52,000, four-year, 6.5% installment note from Regional Bank. The note requires annual payments of $15,179, beginning
on December 31, Year 1. The December 31, Year 2 carrying amount in the amortization table for this installment note will be equal to
)a. $26,000
b. $21,642
Oc. $28,402
Od. $27,635

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