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Hi I need some help with steps:
On January 1 , Year 1, Reinquist borrowed $100,000 by signing 5 year N/P with annual interest 8%. Terms of contract require Reinquist to repay principal over 5 years with payment of $20,000 at end of each year. On December 31, Reinquist made first payment plus interest. On January 1, Year 2 what portion of note should be classified as non-current liabilities?
Answer was $60,000 but I don't get how or why.
Thanks
On January 1 , Year 1, Reinquist borrowed $100,000 by signing 5 year N/P with annual interest 8%. Terms of contract require Reinquist to repay principal over 5 years with payment of $20,000 at end of each year. On December 31, Reinquist made first payment plus interest. On January 1, Year 2 what portion of note should be classified as non-current liabilities?
Answer was $60,000 but I don't get how or why.
Thanks
Financial Accounting Homework Need Help?
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