To help middleincome students finance the cost of their university educations, the Student Loan Authority guarantees student
Question:
Year................... Amount
2018....................... $0.5
2019......................... 1.2
2020......................... 2.0
2021......................... 1.8
1. Prepare the entry that the agency should make in 2017, the year it guarantees the loans. The agency applies a discount rate of 6 percent. It assumes that all guarantee payments will be made at the end of the indicated years.
2. Prepare the entry that it should make at the end of 2018, assuming that it fulfills its guarantees, as estimated, of $0.5 million.
Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...
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Related Book For
Government and Not for Profit Accounting Concepts and Practices
ISBN: 978-1118983270
7th edition
Authors: Michael Granof, Saleha Khumawala, Thad Calabrese, Daniel Smith
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