Question

Shamrock Farms Ltd. needed financing to buy two John Deere tractors. Shamrock receives $250,000 on December 31, 2021, when it issues a 10-year, 6% note payable. The terms provide for semi-annual blended instalment payments on June 30 and December 31 in the amount of $16,804.00.

(a) Your answer has been saved and sent for grading. See Gradebook for score details. Prepare an instalment payment schedule for the first four interest periods. (Round answers to 2 decimal places, e.g. 5,276.25.) SHAMROCK FARMS LTD. Instalment Payment Schedule - Blended Payments Interest Period Cash Payment Interest Expense Reduction of Principal Principal Balance Dec. 31, 2021 $ June 30, 2022 $ $ $ Dec. 31, 2022 June 30, 2023 Dec. 31, 2023 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Attempts: 1 of 1 used

(b) Prepare the journal entries to record the note payable and the first three instalment payments. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 2 decimal places, e.g. 5,276.25.) Date Account Titles and Explanation Debit Credit Dec. 31, 2021 June 30, 2022 Dec. 31, 2022 June 30, 2023

Answer 1

Req a
Amort Chart
Period		cash	Interest	Reduction in	Principal
		Payment	Expense	Principal	balance
31.12.21					250000.00
30.06.22		16804.00	7500.00	9304.00	240696.00
31.12.22		16804.00	7220.88	9583.12	231112.88
30.06.23		16804.00	6933.39	9870.61	221242.27
31.12.23		16804.00	6637.27	10166.73	211075.53
Req b.
Journal entries
S.no.	Accounts title and explanation		Debit $	Credit $
31.12.21	Cash account			250000
	Notes payable				250000
	(for amount borrowed)
30.06.22	Notes payable			9304
	Interest expense			7500
	Cash account				16804
	(for instalment paid)
31.12.22	Notes payable			9583.12
	Interest expense			7220.88
	Cash account				16804
	(for instalment paid)
30.06.23	Notes payable			9870.61
	Interest expense			6933.39
	Cash account				16804
	(for instalment paid)