Monty Inc. developed a new sales gimmick to help sell its inventory of new automobiles. Because many new car buyers need financing, Monty offered a low downpayment and low car payments for the first year after purchase. It believes that this promotion will bring in some new buyers. On January 1, 2017, a customer purchased a new $33,400 automobile, making a downpayment of $680. The customer signed a note indicating that the annual rate of interest would be 8% and that quarterly payments would be made over 3 years. For the first year, Monty required a $409 quarterly payment to be made on April 1, July 1, October 1, and January 1, 2018. After this one-year period, the customer was required to make regular quarterly payments that would pay off the loan as of January 1, 2020.

A) Prepare a note amortization schedule for the first year. (Round answers to 0 decimal places, e.g. 38,548.)

Date Cash Paid Interest Expense Discount Amortized Carrying Amount of Note

1/1/17

4/1/17

7/1/17

10/1/17

1/1/18

B) Indicate the amount the customer owes on the contract at the end of the first year. (Round answer to 0 decimal places, e.g. 38,548.) The customer owes on the contract at the end of the first year $_________

C) Compute the amount of the new quarterly payments.(Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.)

The new quarterly payments $________

D)Prepare a note amortization schedule for these new payments for the next 2 years. (Round answers to 0 decimal places, e.g. 38,548.)

Date Cash Paid Interest Expense Discount Amortized Carrying Amount of Note

1/1/18

4/1/18

7/1/18

10/1/18

1/1/19

4/1/19

7/1/19

10/1/19

1/1/20