Question

An installment note payable for a principal amount of $94,000 at 6% interest requires Lawson Company to repay the principal and interest in equal annual payments of $22,315 beginning December 31, of the first year, for each of the next five years. After the final payment, the carrying amount on the note will be a.$22,315 b.$21,053 c.$1 d.$1,263

Answer 1

$ 0

Step-by-step explanation:

Year Opening balance Interest Repayment Closing balance

1 94000 5640 22315 77325

2 77325 4640 22315 59650

3 59650 3579 22315 40913

4 40913 2455 22315 21053

5 21053 1262 22315 0

hence, after final payment the carrying amount is $ 0