Chapter 8
Non-Current Liabilities
407
AP-16A (
6
)
Evans Ltd. decides to issue a three-year, $150,000 note payable on January 1, 2016 to finance
the purchase of lab equipment, with an interest rate of 6%. The repayment is done annually
on its year-end date of December 31.
Required
a) How much will Evans Ltd. have to pay back at the end of 2016, 2017 and 2018 if the fixed
principal plus interest method is used?
Date
A
Cash Payment
B
Interest Expense
C
Reduction of
Principal
D
Principal Balance
Jan 1, 2016
Dec 31, 2016
Dec 31, 2017
Dec 31, 2018
