chapter 10

Save Dan Dayle started a business by issuing an $87,000 face-value note to First State Bank on January 1, Year 1. The note had an 7 percent annual rate of interest and a five-year term. Payments of $21,218 are to be made each December 31 for five years. Required o. What portion of the December 31, Year 1, payment is applied to interest expense and principal Interest expense Principal b. What is the principal balance on January 1 Year 22 Principal balance c. What portion of the December 31 Year 2, payment is applied to interest expense and principal? (Round your answers to the nearest dollar amount) interest expenso Principal