Homework 9 Instaliment Loan 3. Why is total amount of interest higher under the 60 month plan (there are two reasons) 4. Prepare the journal entry to record the 1tt and 2nd payments under the 36 month financing plan: 5. Prepare the journal entry to record the 1tt and 2nd payments under the 60 month financing plan: 6. Comparing the journal entries for the 1st and 2nd payment (from parts 4&5 ) and put an X in the box for the correct answer: a. Which of the amounts stays the same each month: Cash Interest expense Note payable b. Which of the amounts decreases each month: Cash Interest expense Note payable 7. Assume after making 21 payments you inherited some money. Flush with cash, you decide to pay off the loan. How much will it take to pay off the loan at that time under the 36 month and 60 month options? Assume you are buying a 2018 Mini Cooper with a price of $16,998. The trade in of your old car drops this by $2,998 and you intend to sign an installment note for the remaining $14,000. Payments are made at the end of each month. Your financing options are to finance: 36 months with an APR of 4.80%(0.0480) or 60 months with an APR of 5.76%(0.0576)