Michael purchased a new piece of equipment to be used in its new facility. The $380,000 piece of equipment was purchasedwith a $57,000 down payment and with cash received through the issuance of a $323,000, 8%, 5-year mortgage payableissued on January 1, 2022. The terms provide for annual installment payments of $80,897 on December 31.Principal ReductionYear Period12January 1,2022Year 2022Year 2023CashPaid80,89780,897Interest Expense(8% Interest Rate)Note PayableBalance323,000Fill in the necessary blanks in the amortization table for YEARS 2022 and 2023.Do NOT use dollar signs or commas in your answer. (Round answers to 0 decimal places, e.g. 125.)

Interest expense is the cost incurred for borrowing the fund. Interest is calculated on the…

Michael purchased a new piece of equipment to be used in its new facility. The $380,000 piece of equipment was purchased with a $57,000 down payment and with cash received through the issuance of a $323,000, 8%, 5-year mortgage payable issued on January 1, 2022. The terms provide for annual installment payments of $80,897 on December 31. Year Period 1 2 January 1, 2022 Year 2022 Year 2023 Cash Interest Expense Paid (8% Interest Rate) 80,897 80,897 Principal Reduction Note Payable Balance 323,000

Michael purchased a new piece of equipment to be used in its new facility. The $380,000 piece of equipment was purchased with a $57,000 down payment and with cash received through the issuance of a $323,000, 8%, 5-year mortgage payable issued on January 1, 2022. The terms provide for annual installment payments of $80,897 on December 31. Year Period 1 2 January 1, 2022 Year 2022 Year 2023 Cash Interest Expense Paid (8% Interest Rate) 80,897 80,897 Principal Reduction Note Payable Balance 323,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Required information [The following information applies to the questions displayed below.] On January 1, 2024, Bloomfield Enterprises purchases a building for $327,000, paying $57,000 down and borrowing the remaining $270,000, signing a 7%, 10-year mortgage. Installment payments of $3,134.93 are due at the end of each month, with the first payment due on January 31, 2024. 3-a. Record the first monthly mortgage payment on January 31, 2024. 3-b. How much of the first payment goes to interest expense and how much goes to reducing the carrying value of the loan? Answer is not complete. Complete this question by entering your answers in the tabs below. Req 3a Req 3b Record the first monthly mortgage payment on January 31, 2024. (If no entry is required for select "No Journal Entry Required" in the first account field. Do not round intermediate calcul to 2 decimal places.) No Date General Journal 1 January 31, 2024 Interest Expense Notes Payable Cash Debit 1,559.93( 1,575.00
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Cullumber Electronics issues a $355,500, 3%, 10-year mortgage note on December 31, 2021. The proceeds from the note are to be used in financing a new research laboratory. The terms of the note provide for annual installment payments, exclusive of real estate taxes and insurance, of $41,675. Payments are due on December 31. (a) Prepare an installment payments schedule for the first 4 years. (Round answers to 0 decimal places, e.g. 15,250.) Annual Interest Period Cash Payment Interest Expense Reduction of Principal Principal Balance Issue Date $enter a dollar amount 1 $enter a dollar amount $enter a dollar amount $enter a dollar amount enter a dollar amount 2 enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount 3 enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount 4 enter a dollar amount…
The company purchased a piece of Equipment on 12/1/2023 for use in its business operations. The company financed this purchase 100% and began using the Equipment immediately. The details of the loan are below: Amount $100,000.00 Interest rate 8% Loan period (months) 24 Payment amount $4, 522.73 Start Date 12/1/23 1. explain why an amortization schedule is important and create one 2. Create the journal entry required to initially record this loan. 3. Create any adjusting entries needed at 12/31/2023. 4. Create the journal entry to record the first payment (assume a 1/1/2024 due date)