Question

On September 30, 2019, Lakatan Inc. borrowed P1,000,000 on a 9% note payable. The entity paid the first of four quarterl...


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?

Answer

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

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