Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

2. Transaction Analysis

Journal Entries: Debits and Credits

Financial Accounting

2. Transaction Analysis

Journal Entries: Debits and Credits

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Multiple Choice

Ron borrows $10,000 from a bank and agrees to repay the loan in full, including interest, with a single payment at the end of one year. How many payments should Ron make on the repayment date?

No payments

Two payments

One payment

Twelve payments

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Verified step by step guidance

Understand the problem: Ron borrows $10,000 and agrees to repay the loan in full, including interest, with a single payment at the end of one year. This means the repayment terms specify one lump-sum payment after one year.

Identify the repayment structure: Since the loan agreement specifies a single payment at the end of one year, there is no mention of monthly or multiple payments. This eliminates options like 'No payments,' 'Two payments,' or 'Twelve payments.'

Clarify the concept of a single payment: A single payment means that Ron will pay the principal ($10,000) plus the accrued interest in one transaction at the end of the loan term.

Review the options provided: The correct answer aligns with the repayment terms described in the problem, which is 'One payment.'

Conclude the reasoning: Based on the loan agreement and repayment terms, Ron should make one payment on the repayment date, covering both the principal and interest.