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
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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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.
Principal Reduction
Year Period
1
2
January 1,
2022
Year 2022
Year 2023
Cash
Paid
80,897
80,897
Interest Expense
(8% Interest Rate)
Note Payable
Balance
323,000
Fill 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.)
Transcribed Image Text: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. Principal Reduction Year Period 1 2 January 1, 2022 Year 2022 Year 2023 Cash Paid 80,897 80,897 Interest Expense (8% Interest Rate) Note Payable Balance 323,000 Fill 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.)
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