Emma Company purchased a machine from Noah Corporation on October 31, 2016. In payment for the $234,000 purchase, Emma issued a one-year installment note to be paid in equal monthly payments of $20,791 at the end of each month. The payments include interest at an annual rate of 12%. When recording the December 31, 2016 payment, the Debit to Interest expense will be

Question

Business

Diamond Gilbert

17 January, 10:57

Emma Company purchased a machine from Noah Corporation on October 31, 2016. In payment for the $234,000 purchase, Emma issued a one-year installment note to be paid in equal monthly payments of $20,791 at the end of each month. The payments include interest at an annual rate of 12%. When recording the December 31, 2016 payment, the Debit to Interest expense will be

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Corbin Wolf · Answer 1

On December 31, 2016 the debit to interest expense will be $2,155

Explanation:

Use Following Amortization Schedule to calculate the interest expense on December 31, 2016.

Date Balance Payment Interest 12% Principal payment

November 30 234,000 20791 2340 18,451

December 31 215,549 20791 2155.49 18635.51

on December 31, 2016 the debit to interest expense will be $2,155.