On 1 November 2013, EZ Products borrowed $48 000 on a 5%, 10- year note with annual instalment payments of $4 800 plus interest due on 1 November of each succeeding year. On 31 December 2014, what will the balance be in the account titled Long- term notes payable?
A)$48 000
B)$38 400
C)$43 200
D)$4 800

Question

Quizplus · Accepted Answer

By 31 December 2014, EZ Products would have made two annual payments of $4,800 each, reducing the principal by $9,600. Therefore, the balance in the Long-term notes payable account would be $48,000 - $9,600 = $38,400.

On 1 November 2013, EZ Products Borrowed $48 000 on a 5