On July 1,2013,Avery Services Issued a 4% Long-Term Note Payable

question 21

Multiple Choice

On July 1,2013,Avery Services issued a 4% long-term note payable for $10,000.It is payable over a 5-year term in $2,000 principal installments on July 1 of each year.Each yearly installment will include both principal repayment of $2,000 and interest payment for the preceding one-year period.
-What happens on July 1,2014?

• A) Avery pays out $400 of interest only.
• B) Avery pays out $400 of interest plus $2,000 of principal.
• C) Avery pays out $2,000 of principal only.
• D) Avery pays out the $200 of interest that was accrued at year-end.

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Definitions:

Corporate Scandal

An event or series of events involving unethical behavior or legal violations by a company or its employees.

Survivability

The ability of a system, organization, or individual to remain alive or continue to function in the face of adversity or challenging conditions.

Viability

The ability of an entity or an idea to work successfully and sustainably, often in the context of business or environmental conservation.

Equality

The state of being equal, especially in status, rights, and opportunities.