January 1, Year 1, Luzak Company issued a $12,000, 4-year, 9% installment note to McGee Bank. The note requires annual paymen ember 31, Year 1. rnalize the entries to record the following: ar 1 . 1 Issued the note for cash at its face amount. c. 31 Paid the annual payment on the note, which consisted of interest of $1,080 and principal of $2,624. ar 4 c. 31 Paid the annual payment on the note, including $306 of interest. The remainder of the payment reduced the principal balance on the note. ued the note for cash at its face amount. ear 1, Jan. 1 d the annual payment on the note, which consisted of interest of $1,080 and principal of $2,624. For a compound transaction, if an ry, leave it blank. par 1 Dec 31
January 1, Year 1, Luzak Company issued a $12,000, 4-year, 9% installment note to McGee Bank. The note requires annual paymen ember 31, Year 1. rnalize the entries to record the following: ar 1 . 1 Issued the note for cash at its face amount. c. 31 Paid the annual payment on the note, which consisted of interest of $1,080 and principal of $2,624. ar 4 c. 31 Paid the annual payment on the note, including $306 of interest. The remainder of the payment reduced the principal balance on the note. ued the note for cash at its face amount. ear 1, Jan. 1 d the annual payment on the note, which consisted of interest of $1,080 and principal of $2,624. For a compound transaction, if an ry, leave it blank. par 1 Dec 31
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ASSISTANCE
![**Journal Entry Examples**
### Transaction Entry for Cash Received
**Date: Year 1, Jan. 1**
| Description | Debit ($) | Credit ($) |
|-------------|------------|------------|
| Cash | [ ] | [ ] |
| Note Payable| [ ] | [ ] |
### Annual Payment on Note
**Date: Year 1, Dec. 31**
Paid the annual payment on the note, which consisted of:
- Interest: $1,080
- Principal: $2,624
For compound transactions, if an amount box does not require an entry, leave it blank.
| Description | Debit ($) | Credit ($) |
|-----------------|------------|------------|
| Interest Expense| [ ] | [ ] |
| Note Payable | [ ] | [ ] |
| Cash | [ ] | [ ] |
### Annual Payment on Note (Subsequent Year)
**Date: Year 4, Dec. 31**
Paid the annual payment on the note, including $306 of interest. The remainder of the payment reduced the principal balance on the note.
For compound transactions, if an amount box does not require an entry, leave it blank.
| Description | Debit ($) | Credit ($) |
|-----------------|------------|------------|
| Interest Expense| [ ] | [ ] |
| Note Payable | [ ] | [ ] |
| Cash | [ ] | [ ] |
#### Notes:
- The specific amounts for debit and credit entries would need to be calculated and entered based on the transaction details.
- A dropdown list is typically used to select accounts or descriptions.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F167c4a57-20fc-4ce6-9a90-f7ea4d81de63%2F1380c6e2-e591-49bf-a0b7-5f5a1a19cf1e%2Fia5sjmp_processed.png&w=3840&q=75)
Transcribed Image Text:**Journal Entry Examples**
### Transaction Entry for Cash Received
**Date: Year 1, Jan. 1**
| Description | Debit ($) | Credit ($) |
|-------------|------------|------------|
| Cash | [ ] | [ ] |
| Note Payable| [ ] | [ ] |
### Annual Payment on Note
**Date: Year 1, Dec. 31**
Paid the annual payment on the note, which consisted of:
- Interest: $1,080
- Principal: $2,624
For compound transactions, if an amount box does not require an entry, leave it blank.
| Description | Debit ($) | Credit ($) |
|-----------------|------------|------------|
| Interest Expense| [ ] | [ ] |
| Note Payable | [ ] | [ ] |
| Cash | [ ] | [ ] |
### Annual Payment on Note (Subsequent Year)
**Date: Year 4, Dec. 31**
Paid the annual payment on the note, including $306 of interest. The remainder of the payment reduced the principal balance on the note.
For compound transactions, if an amount box does not require an entry, leave it blank.
| Description | Debit ($) | Credit ($) |
|-----------------|------------|------------|
| Interest Expense| [ ] | [ ] |
| Note Payable | [ ] | [ ] |
| Cash | [ ] | [ ] |
#### Notes:
- The specific amounts for debit and credit entries would need to be calculated and entered based on the transaction details.
- A dropdown list is typically used to select accounts or descriptions.
Transcribed Image Text:### Entries for Installment Note Transactions
On January 1, Year 1, Luzak Company issued a $12,000, 4-year, 9% installment note to McGee Bank. The note requires annual payments of $3,704, beginning on December 31, Year 1.
#### Journalize the entries to record the following:
**Year 1**
**Jan. 1**
- Issued the note for cash at its face amount.
**Dec. 31**
- Paid the annual payment on the note, which consisted of interest of $1,080 and principal of $2,624.
**Year 4**
**Dec. 31**
- Paid the annual payment on the note, including $306 of interest. The remainder of the payment reduced the principal balance on the note.
#### Journal Entries
---
##### Issued the note for cash at its face amount.
**Date**: January 1, Year 1
| Account Titles | Debit ($) | Credit ($) |
|----------------|-------------|-------------|
| **Cash** | 12,000 | |
| | | **Installment Notes Payable** |
| | | 12,000 |
---
##### Paid the annual payment on the note, which consisted of interest of $1,080 and principal of $2,624. For a compound transaction, if an amount box does not require an entry, leave it blank.
**Date**: December 31, Year 1
| Account Titles | Debit ($) | Credit ($) |
|----------------|-------------|-------------|
| **Interest Expense** | 1,080 | |
| **Installment Notes Payable** | 2,624 | |
| | | **Cash** |
| | | 3,704 |
---
(Replace the dropdown arrows and amount boxes with illustrative numbers and account details as necessary for educational context.)
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