(Answered) Problem - bridgeport inc developed a new sales gimmick to

Accounting

Problem - Bridgeport Inc. developed a new sales gimmick to help sell its inventory of new automobiles. Because many new car buyers need financing, Bridgeport offered a low downpayment and low car payments for the first year after purchase. It believes that this promotion will bring in some new buyers.

On January 1, 2017, a customer purchased a new $28,200 automobile, making a downpayment of $600. The customer signed a note indicating that the annual rate of interest would be 8% and that quarterly payments would be made over 3 years. For the first year, Bridgeport required a $345 quarterly payment to be made on April 1, July 1, October 1, and January 1, 2018. After this one-year period, the customer was required to make regular quarterly payments that would pay off the loan as of January 1, 2020

(a) Prepare a note amortization schedule for the first year

(b) Indicate the amount the customer owes on the contract at the end of the first year.

(d) Prepare a note amortization schedule for these new payments for the next 2 years.

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