In October,you borrow $50,000 in order to buy new equipment.The loan is repayable in five years,at 8% annual interest.Semiannual interest payments are due each March and September.Assuming no other long-term debt,what is the initial balance in the long-term debt account?
A)$54,000
B)$50,000
C)$46,000
D)$52,000

Question

Quizplus · Accepted Answer

The initial loan amount is $50,000, and there are no other long-term debts mentioned in the problem. Therefore, the initial balance in the long-term debt account is also $50,000. The semiannual interest payments are not relevant to determining the initial balance.

In October,you Borrow $50,000 in Order to Buy New Equipment