On January 1, Year 1, Wedekind Company issued a $58,000, 4-year, 10% installment note to Shannon Bank. The note requires annual payments of $18,297, 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 $5,800 and principal of $12,497. Year 4 Dec. 31 Paid the annual payment on the note, including $1,664 of interest. The remainder of the payment reduced the principal balance on the note. Issued the note for cash at its face amount. If an amount box does not require an entry, leave it blank. Year 1, Jan. 1 - Select - - Select - - Select - - Select - Paid the annual payment on the note, which consisted of interest of $5,800 and principal of $12,497. If an amount box does not require an entry, leave it blank. Year 1, Dec. 31 - Select - - Select - - Select - - Select - - Select - - Select - Paid the annual payment on the note, including $1,664 of interest. The remainder of the payment reduced the principal balance on the note. If an amount box does not require an entry, leave it blank. Year 4, Dec. 31 - Select - - Select - - Select - - Select - - Select - - Select -

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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Entries for Installment Note Transactions

On January 1, Year 1, Wedekind Company issued a $58,000, 4-year, 10% installment note to Shannon Bank. The note requires annual payments of $18,297, 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 $5,800 and principal of $12,497.
Year 4
Dec. 31	Paid the annual payment on the note, including $1,664 of interest. The remainder of the payment reduced the principal balance on the note.

Issued the note for cash at its face amount. If an amount box does not require an entry, leave it blank.

Year 1, Jan. 1		- Select -	- Select -
		- Select -	- Select -

Paid the annual payment on the note, which consisted of interest of $5,800 and principal of $12,497. If an amount box does not require an entry, leave it blank.

Year 1, Dec. 31	- Select -	- Select -
	- Select -	- Select -
	- Select -	- Select -

Paid the annual payment on the note, including $1,664 of interest. The remainder of the payment reduced the principal balance on the note. If an amount box does not require an entry, leave it blank.