On December 1, 2015, Fine Products Borrowed $80,000 on a 4

question 142

Multiple Choice

On December 1, 2015, Fine Products borrowed $80,000 on a 4%, 8-year note with annual installment payments of $10,000 plus interest due on December 1 of each succeeding year. Which of the following describes the first installment payment made on December 1, 2016?

• A)$10,000 principal plus $3,200 interest
• B)$10,000 principal plus $400 interest
• C)$10,000 principal plus $10,000 interest
• D)$3,200 interest only

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Definitions:

Declared

An explicit, often formal announcement of a particular status or condition.

Short-form Merger

A merger between a parent company and its subsidiary where the parent absorbs the subsidiary without the need for approval by the shareholders of the subsidiary.

Subsidiary

A company that is completely or majority-owned by another company, known as the parent company.

Merger Plan

A detailed proposal for combining two or more companies into one entity, outlining the terms, conditions, and operational strategies post-merger.