A company decides to obtain a small-business loan of $200,000. The financial institution from which the company borrows offers two options: a. Borrow $200,000 at 6% with monthly payments of $3,866.56 over 5 years. b. Borrow $200,000 at 7% with monthly payments of $2,322.17 over 10 years. Required: 1. Record the issuance of an installment note payable under each option. 2. Record the payments for the first and second month under each option. 3. Determine the total amount of interest paid under each option over the full period of the note. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Record the payments for the first and second month under each option. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your answers to 2 decimal places.)
A company decides to obtain a small-business loan of $200,000. The financial institution from which the company borrows offers two options: a. Borrow $200,000 at 6% with monthly payments of $3,866.56 over 5 years. b. Borrow $200,000 at 7% with monthly payments of $2,322.17 over 10 years. Required: 1. Record the issuance of an installment note payable under each option. 2. Record the payments for the first and second month under each option. 3. Determine the total amount of interest paid under each option over the full period of the note. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Record the payments for the first and second month under each option. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your answers to 2 decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Do not give image format

Transcribed Image Text:A company decides to obtain a small-business loan of $200,000. The financial institution from which the company borrows offers two
options:
a. Borrow $200,000 at 6% with monthly payments of $3,866.56 over 5 years.
b. Borrow $200,000 at 7% with monthly payments of $2,322.17 over 10 years.
Required:
1. Record the issuance of an installment note payable under each option.
2. Record the payments for the first and second month under each option.
3. Determine the total amount of interest paid under each option over the full period of the note.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
Record the payments for the first and second month under each option. (If no entry is required for a particular transaction/event, select
"No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your answers to 2 decimal places.)
View transaction list
Journal entry worksheet
Record the first payment of a note for $200,000 at 6% with monthly payments.
of $3,866.56 over 5 years.
Note: Enter debits before credits.
Transaction
1a
Show Transcribed Text
General Journal
A company decides to obtain a small-business loan of $200,000. The financial institution from which the company borrows offers two
options:
Complete this question by entering your answers in the tabs below.
View transaction list
a. Borrow $200,000 at 6% with monthly payments of $3,866.56 over 5 years.
b. Borrow $200,000 at 7% with monthly payments of $2,322.17 over 10 years.
Required:
1. Record the issuance of an installment note payable under each option.
2. Record the payments for the first and second month under each option.
3. Determine the total amount of interest paid under each option over the full period of the note.
Debit
Journal entry worksheet
<
2
Required 1
Required 2 Required 3
Record the payments for the first and second month under each option. (If no entry is required for a particular transaction/event, select
"No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your answers to 2 decimal places.)
Note: Enter debits before credits.
Transaction
1b
Record the second payment of a note for $200,000 at 6% with monthly
payments of $3,866.56 over 5 years.
Notes Payable
Interest Expense
Credit
General Journal
S
Debit
985.67
2,881.00
Credit

Transcribed Image Text:Required 2 Required 3
Record the payments for the first and second month under each option. (If no entry is required for a particular transaction/event, select
"No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your answers to 2 decimal places.)
Required 1
View transaction list
Journal entry worksheet
<
Record the first payment of a note for $200,000 at 7% with monthly payments
of $2,322.17 over 10 years.
Note: Enter debits before credits.
Transaction
2a
3
Show Transcribed Text
Notes Payable
Interest Expense
Required 1
View transaction list
General Journal
Complete this question by entering your answers in the tabs below.
A company decides to obtain a small-business loan of $200,000. The financial institution from which the company borrows offers two
options:
a. Borrow $200,000 at 6% with monthly payments of $3,866.56 over 5 years.
b. Borrow $200,000 at 7% with monthly payments of $2,322.17 over 10 years.
Required:
1. Record the issuance of an installment note payable under each option.
2. Record the payments for the first and second month under each option.
3. Determine the total amount of interest paid under each option over the full period of the note.
Journal entry worksheet
Transaction
2b
Debit
Note: Enter debits before credits.
1,166.67
1,155.50
Required 2 Required 3
Record the payments for the first and second month under each option. (If no entry is required for a particular transaction/event, select
"No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your answers to 2 decimal places.)
Record the second payment of a note for $200,000 at 7% with monthly
payments of $2,322.17 over 10 years.
Notes Payable
Interest Expense
General Journal
Credit
c
Debit
1,159.93
1,162.00
>
Credit
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