1. Company A sells a machine to Company B on September 1 for $27,000. The down payment to be paid by Company B is $3,000. Company B must pay monthly minimum payments of $265. 12% interest rate per annum on the unpaid balance is deducted from each payment and the balance is applied to reduce the principal outstanding.
Company B makes the following payments to Company A:
October 1 $500
November 1 $500
December 1 $1,000
January 2 $500
Prepare a partial amortization schedule in order to answer the following question.
In preparing an amortization schedule, what is the balance at the end of December?

$23,740

$22,712

$23,480

$22,720

None of the other alternatives are correct

Answer rating: 100% (QA)

1 The partial amorti... View the full answer