Proper accounting procedures require accountants to separate principal and interest components on any loan. Allocate the principal
Question:
Proper accounting procedures require accountants to separate principal and interest components on any loan. Allocate the principal and interest portions of a $24,159.18 payment clearing a 147-day loan at 8.88%.
15. A credit union posts the following tiered interest rate structure for its savings accounts. Only each tier is subject to the posted rate and is computed using the daily opening balance in the account. Interest is deposited to the account on the last day of every month.
Balance Interest Rate
$0–$4,000.00 0.15%
$4,000.01–$8,000.00 0.25%
$8,000.01 and up 0.45%
On August 1, the opening balance was $6,400. Three deposits of $2,000, $3,500, and $1,500 were made on August 3, August 10, and August 27, respectively. Two withdrawals of $7,000 and $1,900 were made on August 6 and August 21, respectively. Compute the total interest earned for the month of August.
17. Pendragon Inc. has an operating loan with a balance of $52,000 on September 1 with interest set at prime + 4.75%. On the first of every month the operating loan requires repayment of the accrued interest only. The current prime rate is 4.75% and will decrease to 4.25% on October 7. On September 15, it has a 270-day $20,000 GIC with 3.8% interest maturing. On October 15, it has a 320-day $18,000 GIC with 3.68% interest maturing. It will use these maturing investments to pay down its operating loan. Construct a repayment schedule from September 1 to November 1 only.
Accounting Principles Part 3
ISBN: 978-1118306802
6th Canadian edition Volume 1
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow