On September 30, 2019, Lakatan Inc. borrowed P1,000,000 on a 9% note payable. The entity paid the first of four quarterly payments of P264,200 when due on December 31, 2019.
How much was deducted from the note payable on December 31, 2019?
solution
given
|
Date of issue |
September 30 2019 |
|
Amount of note |
1000000 |
|
Rate of interest |
9% |
|
Payment each quarter |
264200 |
|
First Payment date |
December 31 2019 |
Calculation of balance deducted from note payable
Amount of interest from September 30 2019 to December 31 2019
3 months period
=1000000 * 9% * 3/12
=22500
balance deducted from note payable = 264200 – 22500
=241700