On November 1, 2016, EZ Products borrowed $64,000 on a 5%, five-year note with annual installment payments of $12,800 plus interest due on November 1 of each succeeding year. On November 1, 2018, what is the balance of the long-term notes payable account

The correct answer is $38,400.

Explanation:

According to the scenario, the computation of the given data are as follows:

Amount borrowed = $64,000

Rate = 5%

Time period = 5 years

So, we can calculate balance of the long term notes payable by using following formula:

Balance of the Long-Term Notes Payable = $64,000 - ( $12,800 × 2 years)

= $38,400

month 1 start amount =$3287.90 interest=(3287.90x0.0145/12)3.97 total to pay=$3291.81 paid =$1200 balance =$2,091.87

month 2 starting amount= $2,091.87 interest =$25.28 total to pay =$2117.15 paid =$1200 balance $917.15

month 3 starting amount =$917.15 interest =$11.08 total to pay =$928.23 paid =$928.23 balance =$0 total to pay 1200+1200+928.23 = $3328.23 it will take 3 months to pay a total of $3328.23