With the success of your business, you are ready to establish a storefront. However, you do not have the necessary funds to acquire the building and pay the necessary rent. You are considering borrowing a short-term note from a bank for $130,000. Required part B.Research the lending practices of a local bank.Determine the interest rate charged for a $130,000 loan.What collateral does the bank require to secure the loan?Determine your overall payback amount if you were to repay the loan in less than one year. Choose either a payback with periodic payments or all at the end of the loan term and compare the outcomes.After conducting your research, would you consider borrowing the money?What positive and negative outcomes accompany borrowing the money?Instead of borrowing on a short-term note, you are thinking on borrowing $130,000 and signed a 5-year, note payable with a 12% interest rate. Each annual payment is in the amount of $34,920 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)

Banking is one of the most important functions of tertiary services. Banks provide various types of…

Answered: business

Foundations of Business - Standalone book (MindTap Course List)

4th Edition

ISBN:9781285193946

Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Publisher:William M. Pride, Robert J. Hughes, Jack R. Kapoor

Chapter15: Using Management And Accounting Information

Section: Chapter Questions

Problem 5DQ

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Required part B.

Research the lending practices of a local bank.
Determine the interest rate charged for a $130,000 loan.
What collateral does the bank require to secure the loan?
Determine your overall payback amount if you were to repay the loan in less than one year. Choose either a payback with periodic payments or all at the end of the loan term and compare the outcomes.
After conducting your research, would you consider borrowing the money?
What positive and negative outcomes accompany borrowing the money?
Instead of borrowing on a short-term note, you are thinking on borrowing $130,000 and signed a 5-year, note payable with a 12% interest rate. Each annual payment is in the amount of $34,920 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)

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