This is how a lease option should work: After securing the go-ahead from a mortgage broker and before moving in, your potential buyer will give you a healthy, nonrefundable deposit to go toward the down payment of the house -- typically, 3 to 5 percent of the purchase price.
The Simple Interest Calculation Formula is: Loan Amount (in dollars and cents) x Interest Rate x Time (in days) = Total Interest. You must select the values to enter the Starting Month, Day and Year, and the Ending Month, Day and Year for the time of loan. Enter the amount of the loan and the simple interest rate. Click on Calculate. The calculation is done in days, EXACT calendar days!
The journal entry to record the loan on the borrower's general ledger is as follows: Debit Cash 20,000 Credit Loan Payable 20,000. To calculate monthly interest on the loan, the company must multiply the principal by the annual interest rate. The result is then multiplied by the loan's time period.