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• Using Excel, prepare an appropriate amortization schedule for each part below. Headings are:

Column 1: Date

Column 2: Notes Payable (dr.), Cash (cr.) (amount paid for principal)

Column 3: Cash (cr.) (amount paid for interest)

Column 4: Interest Expense (dr.)

Column 5: Discount on Notes Payable (cr.)

Column 6: Present Value Balance of the Note

Column 7: Annual Cash Flows

• Provide schedules for the input area and your solutions to each of Parts I, II, and III. Each is independent.

• Provide cell printouts of the cell formulae showing contents of each cell for each of Parts I, II, and III.

Part I:

On January 1. 2020, Cristina purchased equipment from Carlos and tendered a $600,000 4 year, 3.5% note when the prevailing interest rate for such obligations was 5.3%. Cristina will pay the $600,000 on December 31, 2023.

Part II:

Assume that the stated interest rate is 4.1% for a $730,000 note. Cristina will pay the $730,000 on December 31, 2024. The present value of the note is $701,559. Determine the market rate (IRR/yield) and use for the schedule.

Part III:

Assume that on 1/1/2020 Cristina issued a $600,000, 5-year non-interest bearing note when the prevailing interest rate for such obligations was 5.2% and will pay the note in four $150,000 installments starting on 12/31/2020.

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