Accounting- Incomplete Records 2009 Q

bobjimmy

On 1/8/2008 Fuller borrowed €120,000 which, together with €30,000 of Fuller’s personal funds,

was used to purchase an adjoining premises. It was agreed that the sum borrowed would berepaid in 20 equal half-yearly instalments. The first instalment becomes due on 1/2/2009.Interest was to be charged at the rate of 6% per annum to be paid monthly at the end of eachmonth


Im in serious need of help. I can work out the interest for the year but i cant figure out how to calculate the loan instalments.

fleeflyfloflum

bobjimmy wrote: »

On 1/8/2008 Fuller borrowed €120,000 which, together with €30,000 of Fuller’s personal funds,

was used to purchase an adjoining premises. It was agreed that the sum borrowed would berepaid in 20 equal half-yearly instalments. The first instalment becomes due on 1/2/2009.Interest was to be charged at the rate of 6% per annum to be paid monthly at the end of eachmonth


Im in serious need of help. I can work out the interest for the year but i cant figure out how to calculate the loan instalments.

It's quite simple actually, 120,000/20 = 6000. There are two in the coming year, so 12,000 as Loan Installments due in the Creditors: amounts falling due within 1 Yr, and a Loan of 108000 in the Financed By section.

Your probably know how to deal with everything else - debit buildings 150,000 and credit capital 30,000.
Loan interest: 120000*6%*5/12

Think thats right

bobjimmy

Thanks a million. Ha thats a bit embarising i didnt realise it was that simple