Entries for Installment Note Transactions On January 1, Year 1, Bryson Company obtained a $66,000, four-year, 8% installment note from Campbell Bank. The note requires annual payments of $19,927, 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 Interest Expense (8% of January 1 December 31 Ending December January 1 Carrying Amount Decrease in Note Payment (Cash Paid) Note Carrying Amount) Carrying Amount 31 Notes Payable $ $ $ $ Year 1 Year 2 Year 3 Year 4 $ 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 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 Year 1 Dec. 31 Year 2 Dec. 1 Year 3 Dec. 31 Year 4 Dec. 31 C. How will the annual note payment be reported in the Year 1 income statement? of $ would be reported on the income statement.
Entries for Installment Note Transactions On January 1, Year 1, Bryson Company obtained a $66,000, four-year, 8% installment note from Campbell Bank. The note requires annual payments of $19,927, 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 Interest Expense (8% of January 1 December 31 Ending December January 1 Carrying Amount Decrease in Note Payment (Cash Paid) Note Carrying Amount) Carrying Amount 31 Notes Payable $ $ $ $ Year 1 Year 2 Year 3 Year 4 $ 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 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 Year 1 Dec. 31 Year 2 Dec. 1 Year 3 Dec. 31 Year 4 Dec. 31 C. How will the annual note payment be reported in the Year 1 income statement? of $ would be reported on the income statement.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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How do I find the carrying amout for each year?
Transcribed Image Text:Entries for Installment Note Transactions
On January 1, Year 1, Bryson Company obtained a $66,000, four-year, 8% installment note from Campbell Bank. The note requires annual payments of $19,927, 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
Interest Expense
(8% of January 1
December 31
Ending
December
January 1
Carrying Amount
Decrease in
Note Payment
(Cash Paid)
Note Carrying
Amount)
Carrying
Amount
31
Notes Payable
$
$
$
$
Year 1
Year 2
Year 3
Year 4
$
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
Transcribed Image Text: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
Year 1 Dec. 31
Year 2 Dec. 1
Year 3 Dec. 31
Year 4 Dec. 31
C. How will the annual note payment be reported in the Year 1 income statement?
of $
would be reported on the income statement.
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