Question
Exercise 7-27 (Part Level Submission) On December 31, 2017, Sage Company signed a $1,023,100note to Pronghorn Bank. The market interest rate at that time was11%.
Exercise 7-27 (Part Level Submission)
On December 31, 2017, Sage Company signed a $1,023,100note to Pronghorn Bank. The market interest rate at that time was11%. The stated interest rate on the note was9%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Sage's financial situation worsened. On December 31, 2019, Pronghorn Bank determined that it was probable that the company would pay back only $613,860of the principal at maturity. However, it was considered likely that interest would continue to be paid, based on the $1,023,100loan.
Amount of cashSagereceived from the loan: 947,474
(b)
Make note amortization schedule for Pronghorn Bank up to December 31, 2019.
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