Question

Cornerstone Markets has beginning long-term debt of $64,500, which is the principal balance of a loan payable to Centre Bank. During the year, the company paid a total of $16,300 to the bank, including $4,100 of interest. The company also borrowed $11,000. What is the value of the ending long-term debt? Multiple Choice

a- $45.100
b- $53300
c- $58.200

Answer 1

The value of the ending long-term debt is $63,300.

Step-by-step explanation:

To calculate the value of the ending long-term debt, we need to consider the beginning long-term debt, the payments made during the year, and the additional borrowing.

The beginning long-term debt is $64,500. The total payments made to the bank during the year, including interest, are $16,300. This means that the principal payment made during the year is $16,300 - $4,100 = $12,200.

The ending long-term debt can be calculated by subtracting the principal payment from the beginning long-term debt and adding the additional borrowing: $64,500 - $12,200 + $11,000 = $63,300.

Therefore, the value of the ending long-term debt is $63,300.