Essay
On January 1, 1999, a company incurred a debt of $11,663, which is payable in four equal annual instalments of $3,600, starting on December 31, 1999.
(a)The implicit interest rate is % (rounded to the nearest percent).
(b)Give the journal entry to record the second annual payment (on December 31, 2000).
Correct Answer:
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(a)Implicit interest rate: 9%
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