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Zetix borrowed $20,000 on a one-year, 10 percent note payable from the local bank on March 1. Interest was paid quarterly, and the note was repaid one year from the time the money was borrowed.
Requirements
Problem 1: Calculate the amount of cash payments Zetix was required to make in each of the two calendar years that were affected by the note payable assuming accounting period ends on Dec. 31 each year.
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