Answered step by step
Verified Expert Solution
Question
1 Approved Answer
*Problem 14-3 Oriole Inc. developed a new sales gimmick to help sell its inventory of new automobiles. Because many new car buyers need financing, Oriole
*Problem 14-3 Oriole Inc. developed a new sales gimmick to help sell its inventory of new automobiles. Because many new car buyers need financing, Oriole 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 $31,400 automobile, making a downpayment of $1,240. 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, Oriole required a $377 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 Prepare a note amortization schedule for the first year. (Round answers to 0 decimal places, e.g. 38,548.) Cash Paid Interest Expense Discount Amortized Carrying Amount of Note Date 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 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 Prepare a note amortization schedule for these new payments for the next 2 years (Round answers to 0 decimal places, e.g. 38,548.) Cash Paid Interest Expense Discount Amortized Carrying Amount of Note Date 10/1/18 10/1/19 1/1/20
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started