Question

On April 1, Fisher Corporation borrowed $400,000 from its bank by signing a 9%, 5-year note payable. The note calls for 60 monthly payments of $6,150, which includes both interest and principal components. a. Interest expense budgeted for April amounts to: $_______________ b. The carrying value of the note to be reported in the company's budgeted balance sheet as of April 30 is: $_______________ c. Interest expense budgeted for May amounts to (round to nearest whole dollar): $_______________ d. The carrying value of the note to be reported in the company's budgeted balance sheet as of May 31 is (round to nearest whole dollar): $_______________ Essay

Answer 1

a) 3,000

b) 396,850

c) 2,976.38

d) 393,873.62‬

Step-by-step explanation:

a) principal x rate x time = interest

400,000 x 0.09 x 1/12 = 3,000

b) 6,150 - 3,000 = 3,150 principal payment

400,000 - 3,150 = 396,850

c) principal (carrying value) x rate x time = interest

396,850 x 0.09 x 1/12 = 2,976.38

d) 396,850 - 2,976.38 = 393,873.62‬