On June 1 Year 1. you have just graduated college and have landed that big job to earn your first real paycheck. To celebrato, you decide to buy the new model T-2000 Racer. The car costs $50,000. You apply a down payment of $2,000 that you saved while working part-time in college at Bob's Burger Joint. You must finance the remaining portion by borrowing $48,000 using an installment note with a 10% annual interest rate. Payments of $121740 are due each month over the next four years (48 months), beginning July Year 1. Examine the graphs below and answer the following questions. Car Payments Over 48 Months Loan Balance Over 48 Months 317.40 $1,400 52421 $60,000 $1,200 Ss0,000 S40,000 $1.000 $100 5000 $400 $30.000 $70,000 $10.000 $0 $100 so 0246 10 12 14 16 18 20 22 26 28 30 32 34 36 38 40.4541 400.00 19119 Portion A of Total Payment (bottom Portion of Total Payment tool 024610 12 14 16 18 20 22 220280 Required: 1. The amount of the total monthly payment over the 48-month period is: 2. The loan balance over the 48- month period is: 3-a. In the graph showing the 48 car payments, each payment amount is broken into two portions. What do Portion A (bottom) and Portion B (top) represent? 3-b. The portion of the monthly payment applied to the loan balance over the 48-month period is: 3-c. The portion of the monthly payment applied to interest over the 48-month period: 4. Suppose the purchase of the car on June 1, Year 1, was made by a company. How would the company record the purchase of the car by issuing the $48,000 installment note and paying cash of $2,000. (Hint: To record the car, assume the company uses the Equipment account) 5. Record the first installment payment by the company on July 1 Year 1 (callout amounts in the graph are given) 6. Record the second installment payment by the company on August 1 Year 1. The amount of the total monthly payment over the 48-month period is: Increasing Decreasing Remaining the same The loan balance over the 48-month period is: Increasing Decreasing Remaining the same In the graph showing the 48 car payments, each payment amount is broken into two portions. What do Portion A (bottom) and Portion B (top) represent? Portion A Portion B The portion of the monthly payment applied to the loan balance over the 48-month period is: Dincreasing DDecreasing DRemaining the same The portion of the monthly payment applied to interest over the 48-month period: O Increasing O Decreasing ORemaining the same Journal entry worksheet Record the first installment payment on the note issued by the company on July 1, Year 1. Note: Enter debits before credits General Journal Date July 01 Debit Record entry Clear entry View general jougal Journal entry worksheet
