Old Money Company borrowed $1 million from a bank on January 1, 2004. The loan is to

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Old Money Company borrowed $1 million from a bank on January 1, 2004. The loan is to be repaid in annual installments over a three-year period. The bank requires a 9% return.

a. What is the amount of Old Money's required payment to the bank each year?

b. How much interest expense will Old Money incur each year?

c. Show how this loan would be entered into Old Money's books on January 1, 2004.

d. Show how Old Money's first annual installment payment would be entered into its books. Use the format below for parts C andD.

Old Money Company borrowed $1 million from a bank on

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Financial Accounting Information For Decisions

ISBN: 978-0324672701

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Authors: Robert w Ingram, Thomas L Albright

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Question Posted: Jun 20, 2012 06:22 AM

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Old Money Company borrowed $1 million from a bank on January 1, 2004. The loan is to

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ASSETS +OWNERS EQUITY Contributed Retained Capital Earnings Other Cash Assets Date Accounts

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a 395055 Because the three payments will pay off the amount b...View the full answer

Financial Accounting Information For Decisions

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