On January 1,2011,Ace Electronics borrowed $40,000 on a five-year,7% note.The loan will be repaid in 5 equal installments of $9,756 each year,beginning on December 31,2011.Notes payable at December 31,2012 will be ________ notes payable at December 31,2011.

Question

Quizplus · Accepted Answer

The notes payable at December 31,2012 will be lower than notes payable at December 31,2011 because one installment of $9,756 will have been paid in 2011, reducing the outstanding balance of the loan.

On January 1,2011,Ace Electronics Borrowed $40,000 on a Five-Year,7% Note