Company A sells a machine to Company B on September 1 for $30,000. The down...
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Accounting
Company A sells a machine to Company B on September 1 for $30,000. The down payment to be paid by Company B is $5,000. Company B must pay monthly minimum payments of $200.12% interest rate per annum on the unpaid balance is deducted from each payment and the balance is applied to reduce the principal outstanding.
Company B makes the following payments to Company A:
October 1 $500
November 1 $500
December 1 $1,000
January 2 $500
Prepare a partial amortization schedule in order to answer the following question.
In preparing an amortization schedule, what is the balance on the loan to be used on September 1?
Multiple Choice
$30,000
$ 25000
$ 150000
$ none of the alternatives are correct
$ 5000
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