Question
In: Accounting
On January 1, Year 1, Bryson Company obtained a $39,000, four-year, 10% installment note from Campbell...
On January 1, Year 1, Bryson Company obtained a $39,000, four-year, 10% installment note from Campbell Bank. The note requires annual payments of $12,303, beginning on December 31, Year 1.
a. Prepare an amortization table for this installment note, similar to the one presented in Exhibit 4.
Note: Round the computation of the interest expense to the nearest whole dollar. Enter all amounts as positive numbers. In Year 4, round the amount in the Decrease in Notes Payable column either up or down to ensure that the Carrying Amount zeroes out.
| Amortization of Installment Notes | ||||||||||||||||||||
| Year Ending December 31 |
January 1 Carrying Amount |
Note Payment (Cash Paid) |
Interest Expense (10% of January 1 Note Carrying Amount) |
Decrease in Notes Payable |
December 31 Carrying Amount |
|||||||||||||||
| Year 1 | $fill in the blank 5cffd20c4f9cfe8_1 | $fill in the blank 5cffd20c4f9cfe8_2 | $fill in the blank 5cffd20c4f9cfe8_3 | $fill in the blank 5cffd20c4f9cfe8_4 | $fill in the blank 5cffd20c4f9cfe8_5 | |||||||||||||||
| Year 2 | fill in the blank 5cffd20c4f9cfe8_6 | fill in the blank 5cffd20c4f9cfe8_7 | fill in the blank 5cffd20c4f9cfe8_8 | fill in the blank 5cffd20c4f9cfe8_9 | fill in the blank 5cffd20c4f9cfe8_10 | |||||||||||||||
| Year 3 | fill in the blank 5cffd20c4f9cfe8_11 | fill in the blank 5cffd20c4f9cfe8_12 | fill in the blank 5cffd20c4f9cfe8_13 | fill in the blank 5cffd20c4f9cfe8_14 | fill in the blank 5cffd20c4f9cfe8_15 | |||||||||||||||
| Year 4 | fill in the blank 5cffd20c4f9cfe8_16 | fill in the blank 5cffd20c4f9cfe8_17 | fill in the blank 5cffd20c4f9cfe8_18 | fill in the blank 5cffd20c4f9cfe8_19 | 0 | |||||||||||||||
| $fill in the blank 5cffd20c4f9cfe8_20 | $fill in the blank 5cffd20c4f9cfe8_21 | $fill in the blank 5cffd20c4f9cfe8_22 | ||||||||||||||||||
b. Journalize the entries for the issuance of the note and the four annual note payments.
Note: For a compound transaction, if an amount box does not require an entry, leave it blank. For the Year 4 entry (due to rounding), adjust Notes Payable up or down to ensure that debits equal credits.
| Year 1 Jan. 1 | fill in the blank a0c0bef69fa507c_2 | ||
| fill in the blank a0c0bef69fa507c_4 | |||
| Year 1 Dec. 31 | fill in the blank a0c0bef69fa507c_6 | fill in the blank a0c0bef69fa507c_7 | |
| fill in the blank a0c0bef69fa507c_9 | fill in the blank a0c0bef69fa507c_10 | ||
| fill in the blank a0c0bef69fa507c_12 | fill in the blank a0c0bef69fa507c_13 | ||
| Year 2 Dec. 31 | fill in the blank a0c0bef69fa507c_15 | fill in the blank a0c0bef69fa507c_16 | |
| fill in the blank a0c0bef69fa507c_18 | fill in the blank a0c0bef69fa507c_19 | ||
| fill in the blank a0c0bef69fa507c_21 | fill in the blank a0c0bef69fa507c_22 | ||
| Year 3 Dec. 31 | fill in the blank a0c0bef69fa507c_24 | fill in the blank a0c0bef69fa507c_25 | |
| fill in the blank a0c0bef69fa507c_27 | fill in the blank a0c0bef69fa507c_28 | ||
| fill in the blank a0c0bef69fa507c_30 | fill in the blank a0c0bef69fa507c_31 | ||
| Year 4 Dec. 31 | fill in the blank a0c0bef69fa507c_33 | fill in the blank a0c0bef69fa507c_34 | |
| fill in the blank a0c0bef69fa507c_36 | fill in the blank a0c0bef69fa507c_37 | ||
| fill in the blank a0c0bef69fa507c_39 | fill in the blank a0c0bef69fa507c_40 |
c. How will the annual note payment be reported
in the Year 1 income statement?
of $fill in the blank 4b0e5904d024042_2 would be
reported on the income statement.
Solutions
Expert Solution
a) Ammortization of Installment Notes
| Year Ending December 31 | January 1 Carrying Amount | Note Payment (Cash Paid) | Interest expennse(10% of January 1 Note Carrying Amount) | Decrease in Notes Payable | December 31 Carrying Amount |
| Year 1 | $39,000 | $12,303 | $3,900 | $8,403 | $30,597 |
| (10%x39000) | (12303-3900) | (39000-8403) | |||
| Year 2 | $30,597 | $12,303 | $3,060 | $9,243 | $21,354 |
| (10%x30597) | (12303-3060) | (30597-9243) | |||
| Year 3 | $21,354 | $12,303 | $2,135 | $10,168 | $11,186 |
| (10%x21354) | (12303-2135) | (21354-10168) | |||
| Year 4 | $11,186 | $12,303 | $1,117 | $11,186 | 0 |
| (12303-11186) | (12303-11186) | (11186-11186) |
b) Journal Entries
| Date | Accounts | Debit | Credit |
| Year 1 Jan 1 | Cash | $39,000 | |
| Notes Payable | $39,000 | ||
| Year 1 Dec 31 | Notes Payable | $8,403 | |
| Interest Expense | $3,900 | ||
| Cash | $12,303 | ||
| Year 2 Dec 31 | Notes Payable | $9,243 | |
| Interest Expense | $3,060 | ||
| Cash | $12,303 | ||
| Year 3 Dec 31 | Notes Payable | $10,168 | |
| Interest Expense | $2,135 | ||
| Cash | $12,303 | ||
| Year 4 Dec 31 | Notes Payable | $11,186 | |
| Interest Expense | $1,117 | ||
| Cash | $12,303 | ||
c)$3,900 of $12,303 would be reported on the income statement as interest expense.
ekkarill92 answered 1 year agoRelated Solutions
On January 1, Year 1, Bryson Company obtained a $71,000, four-year, 11% installment note from Campbell...
On January 1, Year 1, Bryson Company obtained a $71,000,
four-year, 11% installment note from Campbell Bank. The note
requires annual payments of $22,885, beginning on December 31, Year
1.
a. Prepare an amortization table for this
installment note, similar to the one presented in Exhibit 4.
Note: Round the computation of the interest
expense to the nearest whole dollar. Enter all amounts as positive
numbers. In Year 4, round the amount in the Decrease in Notes
Payable column either...
Entries for Installment Note Transactions On January 1, Year 1, Bryson Company obtained a $19,000, four-year,...
Entries for Installment Note Transactions
On January 1, Year 1, Bryson Company obtained a $19,000,
four-year, 11% installment note from Campbell Bank. The note
requires annual payments of $6,124, beginning on December 31, Year
1.
a. Prepare an amortization table for this
installment note, similar to the one presented in Exhibit 4.
Note: Round the computation of the interest
expense to the nearest whole dollar. Enter all amounts as positive
numbers. In Year 4, round the amount in the Decrease...
Entries for Installment Note Transactions On January 1, Year 1, Bryson Company obtained a $55,000, four-year,...
Entries for Installment Note Transactions
On January 1, Year 1, Bryson Company obtained a $55,000,
four-year, 11% installment note from Campbell Bank. The note
requires annual payments of $17,728, beginning on December 31, Year
1.
a. Prepare an amortization table for this
installment note, similar to the one presented in Exhibit 4.
Note: Round the computation of the interest
expense to the nearest whole dollar. Enter all amounts as positive
numbers. In Year 4, round the amount in the Decrease...
Entries for Installment Note Transactions On January 1, Year 1, Bryson Company obtained a $33,000, four-year,...
Entries for Installment Note Transactions
On January 1, Year 1, Bryson Company obtained a $33,000,
four-year, 8% installment note from Campbell Bank. The note
requires annual payments of $9,963, beginning on December 31, Year
1.
a. Prepare an amortization table for this
installment note, similar to the one presented in Exhibit 4.
Note: Round the computation of the interest
expense to the nearest whole dollar. Enter all amounts as positive
numbers. In Year 4, round the amount in the Decrease...
Entries for Installment Note Transactions On January 1, Year 1, Bryson Company obtained a $26,000, four-year,...
Entries for Installment Note Transactions
On January 1, Year 1, Bryson Company obtained a $26,000,
four-year, 12% installment note from Campbell Bank. The note
requires annual payments of $8,560, beginning on December 31, Year
1.
a. Prepare an amortization table for this
installment note, similar to the one presented in Exhibit 4.
Note: Round the computation of the interest
expense to the nearest whole dollar. Enter all amounts as positive
numbers. In Year 4, round the amount in the Decrease...
On January 1, Gemstone Company obtained a $200,000, 10-year 9% installment note from Guarantee Bank. The...
On January 1, Gemstone Company obtained a $200,000, 10-year 9%
installment note from Guarantee Bank. The note requires annual
payments of $31,164, with the first payment occuring on the last
day of the fiscal year. The first payment consists of interest of
$18,000 and principal repayument of $13,164. The journal entry to
record the payment of the first annual amount due on the note would
include a Double-click on the box below to edit your answer
choices. A.debit to cash...
Ex 14-12 Entries for installment note transactions ObJ. 4 On January 1, 2016, Bryson Company obtained...
Ex 14-12 Entries for installment note transactions ObJ. 4 On
January 1, 2016, Bryson Company obtained a $147,750, four-year, 7%
installment note from Campbell Bank. The note requires annual
payments of $43,620, beginning on December 31, 2016. a. Prepare an
amortization table for this installment note, similar to the one
presented in Exhibit 4. b. Journalize the entries for the issuance
of the note and the four annual note payments. c. Describe how the
annual note payment would be reported...
On January 1, 2021, Texas Inc. obtained a $50,000, four-year, 7% installment note from Arkansas Bank....
On January 1, 2021, Texas Inc. obtained a $50,000, four-year, 7%
installment note from Arkansas Bank. The note requires four annual
payments of $14,761, beginning on December 31, 2021. The portion of
the Notes Payable that would be included in the current liability
section of Texas’s balance sheet at December 31, 2021, after the
first payment is made would be:
A) $35,239
B) $38,739
C) $12,049
D) $14,761
On January 1, Year 1, Stratton Company borrowed $140,000 on a 10-year, 6% installment note payable....
On January 1, Year 1, Stratton Company borrowed $140,000 on a
10-year, 6% installment note payable. The terms of the note require
Stratton to pay 10 equal payments of $19,022 each December 31 for
10 years. The required general journal entry to record the payment
on the note on December 31, Year 2 is:
Multiple Choice
Debit Interest Expense $8,400; debit Notes Payable $10,622;
credit Cash $19,022.
Debit Notes Payable $140,000; debit Interest Expense $5,022;
credit Cash $19,022.
Debit Notes...
On January 1, 2017, Eagle borrows $25,000 cash by signing a four-year, 7% installment note. The...
On January 1, 2017, Eagle borrows $25,000 cash by signing a
four-year, 7% installment note. The note requires four equal
payments of $7,381, consisting of accrued interest and principal on
December 31 of each year from 2017 through 2020. (Round
your intermediate calculations and final answers to the nearest
dollar amount.)
Prepare the journal entries for Eagle to record the loan on January
1, 2017, and the four payments from December 31, 2017, through
December 31, 2020.
Eagle borrows $25,000...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- More and more adults are considering commuting to work by bicycle rather than car, but few...
- Please answer these questions Data Processing and Analysis using python. Thank you In statistics, an outlier...
- Write a function file that accepts each of the four vectors as inputs. The function file...
- Kant says that to act morally is to act out of duty. How does this differ...
- Suppose you are trying to determine the capacity (in gallons) of the gas tank needed on...
- List the arithmetic operators used in BASIC and state their priorities of execution in a statement....
- Describe the espoused values of a company you have worked for (or been exposed to -...
ADVERTISEMENT