Compute the amount of the new quarterly payments

Assignment Help Accounting Basics
Reference no: EM131106250

1. (Negative Amortization) Good-Deal Inc. developed a new sales gimmick to help sell its inventory of new automobiles. Because many new car buyers need financing, Good-Deal offered a low down payment and low car payments for the first year after purchase. It believes that this promotion will bring in some new buyers. On January 1, 2010, a customer purchased a new $33,000 automobile, making a down payment of $1,000. 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, Good-Deal required a $400 quarterly payment to be made on April 1, July 1, October 1, and January 1, 2011. After this one-year period, the customer was required to make regular quarterly payments that would pay off the loan as of January 1, 2013. 

(a) Prepare a note amortization schedule for the first year.
(b) Indicate the amount the customer owes on the contract at the end of the first year.
(c) Compute the amount of the new quarterly payments.
(d) Prepare a note amortization schedule for these new payments for the next 2 years.
(e) What do you think of the new sales promotion used by Good-Deal? 

Reference no: EM131106250

Questions Cloud

What is the area of the largest rectangle : Solve the given problems by finding the appropriate derivative.
Question regarding the characteristic of the target market : Develop at least one question for each characteristic of the target market (demographic, geographic, psychographic, and behavioral) that will be important for you as you determine the marketing strategy for this new product.
Why are accruals called spontaneous sources of funds : Why are accruals called spontaneous sources of funds, what are their costs, and why don't firms use more of them?
Compute the amount of the new quarterly payments : Indicate the amount the customer owes on the contract at the end of the first year.
For what value of x is s a maximum : Solve the given problems by finding the appropriate derivative.
What was the data collection method to generate data : Was the method appropriate for the study design type? Were participants relevant to the research question and was their selection well reasoned? Was sampling done until saturation or redundancy in data was reached?
Prepare the journal entry to record this retirement : Prepare the journal entry to record the issuance of the bonds and the related bond issue costs incurred on January 1, 2009.
Design and building a distributed information system : Distributed Systems Design and building a Distributed Information System. This coursework must be completed individually Detailed Specification

Reviews

Write a Review

Accounting Basics Questions & Answers

  On december 30 2011 roberta purchased four tickets to a

on december 30 2011 roberta purchased four tickets to a charity ball sponsored by the city of san diego for the benefit

  Methods of reporting an accounting change

There are two methods of reporting an accounting change:

  What are the components of pension expense how do the

what are the components of pension expense? how do the components of pension expense differ among the various types of

  In order to consider the value of choice 1 what time value

you are building a yacht. it will be done in 5 years. you have 3 choices regarding payment. 1 you can pay for it now

  Net returns and long-short-term gains

James Welling, a 37 year old engineer has an appointment to meet you in about an hour. As you are reviewing his accounts, you notice that he is a fairly active trader. He seems to do pretty well with returns that outpace the averages

  The amount of the deduction would be and the corporation

in 2014 gray corporation a calendar year c corporation has a 75000 charitable contribution carryover from a gift made

  Actual output was 1000 units the companys per unit

the following information is available actual inputs for actual price each unit of output per unit of input direct

  Cash flows from operating activities-direct method the cash

cash flows from operating activities-direct method the cash flows from operating activities are reported by the direct

  Work in process and factory overhead

Determine the amount of materials transferred to Work in Process and Factory Overhead for the current month. Illustrate the effect on the accounts and financial statements of the materials transferred in (a)

  Jenkins appliances has cash flow problems and needs to

jenkins appliances has cash flow problems and needs to borrow between 50000 and 60000 for approximately sixty days.

  Prepare the general journal entries to record the share

Prepare the general journal entries to record the share issue and the purchase of the land and building on January 1 and the amortization expense on December 31, 20B.

  Determine danny and mary taxable income

Your firm has clients named Danny and Mary. They are married and have two dependent children. They also fully support Mary's mother, who lives with them and has no income.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd