EB7.12.2 McMasters Inc. specializes in BBQ accessories. In order for the company to expand its...
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EB McMasters Inc. specializes in BBQ accessories. In order for the company to expand its business, they take out a longterm loan in the amount of $ Assume that any loans are created on January The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is Each year on December the company pays down the principal balance by $ This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December of that year. A Determine the outstanding principal balance on December of the first year that is computed for interest. B Compute the interest accrued on December of the first year. C Make a journal entry to record interest accumulated during the first year, but not paid as of December of that first year.
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