Drensic Machinery issues an $1,200,000, 9%, 12 year r he termo f the note provide for anual installment paym 135 06
Drensic Machinery issues an $1,200,000, 9%, 12 year r he termo f the note provide for anual installment paym 135 06
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 2
Forensic Machinery issues an $1,200,000, 9%, 12 year mortgage note on December 31, 2022.
The termo f the note provide for anual installment payments, exclusive of real estate taxes, of
$135,000. Payments are due on December 31.
Instructions:
1. Prepare an installment payment Schedule for the first 5 years.
Annual
Interest
Period
Issue Date
1
2
3
4
5
Cash
Payment
Interest
Expense
Reduction
of Principal
Principal
Balance
2. Prepare the entries for (a) the loan and (b) the first installment payment.
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