Question

On December 31, 2017, Sunland Inc. rendered services to Beghun Corporation at an agreed price of $105,784, accepting $42,000 down and agreeing to accept the balance in four equal installments of $21,000 receivable each December 31. An assumed interest rate of 12% is imputed.

Prepare an amortization schedule. Assume that the effective-interest method is used for amortization purposes. (Round answers to 0 decimal places, e.g. 5,275.)

December 31, 2017
Schedule of Note Discount Amortization
Date
Cash
Received
Interest
Revenue
Carrying
Amount of Note
12/31/17 $
$
$
12/31/18
12/31/19
12/31/20
12/31/21

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Prepare the entries that would be recorded by Sunland Inc. for the sale on December 31, 2017. (Round answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation
Debit
Credit

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Prepare the entries that would be recorded by Sunland Inc. for the (a) receipts and (b) interest on December 31, 2018. (Round answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No.
Account Titles and Explanation
Debit
Credit
(a)
(b)

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Prepare the entries that would be recorded by Sunland Inc. for the (a) receipts and (b) interest on December 31, 2019. (Round answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No.
Account Titles and Explanation
Debit
Credit
(a)
(b)

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Prepare the entries that would be recorded by Sunland Inc. for the (a) receipts and (b) interest on December 31, 2020. (Round answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No.
Account Titles and Explanation
Debit
Credit
(a)
(b)

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Prepare the entries that would be recorded by Sunland Inc. for the (a) receipts and (b) interest on December 31, 2021. (Round answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No.
Account Titles and Explanation
Debit
Credit
(a)
(b)

Answer 1

Calculation of Amortisation schedule :
Particulars	Amount($)
sale price	$         105,784.00
down payment	$           42,000.00
balance amount	$           63,784.00
interest rate	$                    0.12
number of years	$                    4.00
installment amount	$           21,000.00
a	b	c	d	e	f
year	opening balance	interest ( b * 12 % )	installment	principal ( d - c )	closing balance ( b - e )
0	$           63,784.00				$                    63,784.00
1	$           63,784.00	$               7,654.00	$       21,000.00	$        13,346.00	$                    50,438.00
2	$           50,438.00	$               6,053.00	$       21,000.00	$        14,947.00	$                    35,491.00
3	$           35,491.00	$               4,259.00	$       21,000.00	$        16,741.00	$                    18,750.00
4	$           18,750.00	$               2,250.00	$       21,000.00	$        18,750.00	$                                 -
Total		$             20,215.00
Journal entry :
Accounts title and explaination :	Debit	Credit
bank a/c	$           42,000.00		down payment
receivable a/c	$           84,000.00		( 21000 * 4 )
To income from services		$           105,784.00	balance amount
To interest income accrued		$             20,215.00	interest amount
( to record for the income from services rendered )