Problems On Noninterest Bearing Notes
Problems On Noninterest Bearing Notes
Principal 4,000,000
Rate 10%
Interest income, 12/31/20x1 400,000
Principal 4,000,000
Add: Interest income,
12/31/20x1 400,000
Principal and interest 4,400,000
Rate 10%
Interest income, 12/31/20x2 440,000
Principal 4,000,000
Add: Interest income,
12/31/20x1& 12/31/22 840,000
Principal and interest 4,840,000
Rate 10%
Interest income, 12/31/20x3 484,000
Alternatively:
(4,000,000 x 1.10) x
Interest income, 20x2 10%
=440,00
0
(4,000,000 x 1.10 x
Interest income, 12/31/20x2 1.10) x 10%
=484, 000