On January 1, 20x1, Lawrence Lenders loaned $8.4 million to Wilkins Food Products, Inc. to purchase a frozen food storage facility. Wilkins signed a three-year, 4% installment note to be paid in three equal payments at the end of each year. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Prepare the following for Lawrence Lenders: 1. Prepare the journal entry for lending the funds on January 1, 20x1. 2. Prepare an amortization schedule for the three-year term of the installment note. 3. Prepare the journal entry for the first installment payment received on December 31, 20x1.
On January 1, 20x1, Lawrence Lenders loaned $8.4 million to Wilkins Food Products, Inc. to purchase a frozen food storage facility. Wilkins signed a three-year, 4% installment note to be paid in three equal payments at the end of each year. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Required: Prepare the following for Lawrence Lenders:
1. Prepare the
2. Prepare an amortization schedule for the three-year term of the installment note.
3. Prepare the journal entry for the first installment payment received on December 31, 20x1.
4. Prepare the journal entry for the third installment payment received on December 31, 20x3.
The question is based on the concept of Financial Accounting.
In order to prepare the amortization we need to calculate the equal annual installment.
As per the Bartleby guidelines we are allowed to answer only the first three sub-parts in case of multiple sub-parts.
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