Asked by Ricky Swearingen on Jul 05, 2024
Verified
The amount of principal that is paid at December 31,2019 is:
A) $13,790,800.
B) $6,209,200.
C) $6,000,000.
D) $10,000,000.
Principal
The original sum of money borrowed in a loan, or the amount of the loan that has yet to be repaid, excluding interest.
Annual Payments
Regular payments made yearly, often referring to the interest or dividends paid by bonds or stocks.
Compounded Annually
This term refers to the process of calculating interest on both the initial principal and the accumulated interest from previous periods, with the compounding occurring once per year.
- Acquire knowledge on the methods for managing and disclosing long-term liabilities, including but not limited to notes payable and lease commitments.
Verified Answer
CH
Colonte HightowerJul 06, 2024
Final Answer :
B
Explanation :
The first step is to calculate the interest for the year, which is 10% of $37,908,000, equaling $3,790,800. Since the total payment is $10 million, the remainder after paying the interest is the principal payment. Therefore, $10,000,000 - $3,790,800 = $6,209,200.
Learning Objectives
- Acquire knowledge on the methods for managing and disclosing long-term liabilities, including but not limited to notes payable and lease commitments.