Answer:
B
Explanation:
Here, in this question, we are asked to determine the decrease in notes payable that peachtree should record in the first year.
To determine this, we proceed as follows;
Interest payment for the first year = 30000*7% i.e 2100
Principal amount paid = Total amount paid - Interest amount
= 7317 -2100 i.e 5217
Notes payable should be reduced by 5217
Answer:
b. $5,217.
Explanation:
Note annual payment includes the interest payment for the period and the residual of total payment made and interest is the the payment towards the principal value of the lease.
Total Loan value = $30,000
Annual Loan payment = $7,317
Interest for the period = $30,000 x 7% = $2,100
Principal Payment = $7,317 - $2,100 = $5,217
The Liability is decrease by $5,217
