Recording Entries for an Installment Note PayableOn January 1 of Year 1, a borrower signed a long-term note, face amount of $160,000; time to maturity is three years; stated rate of 8%. The market rate is 10%. The note will be paid in three equal annual installments of $62,085 on each December 31 (which is the accounting year-end for the borrower).RequiredNote: Round your answer to the nearest whole dollar.Please avoid answers in image thank you a. Compute the cash received by the borrower.b. Prepare a debt amortization schedule.Note: Round each amount in the table to the nearest whole dollar.Note: Use a negative sign for the "Reduction in N.P." amounts.DateJan. 1, Year 1Dec. 31, Year 1 $Dec. 31, Year 2 $Dec. 31, Year 3 $Total$DateJan. 1, Year 1Dec. 31, Year 1Dec. 31, Year 2CashDec. 31, Year 3Interest Expense Reduction in N.P. Carrying Value$$$0 $c. Provide the required entries for the borrower for the issuance of the note on January 1, Year 1, and the interest payments onDecember 31 of Year 1, Year 2, and Year 3.Note: Round your answer to the nearest whole dollar.To record issuance of note.Account NameTo record interest payment.$$To record interest payment.$0 $To record interest payment.0$$S$0<< <Dr.Cr.

Written agreements called "notes payable" state that one party will give the other party a specific…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Recording Entries for an Installment Note Payable

On January 1 of Year 1, a borrower signed a long-term note, face amount of $160,000; time to maturity is three years; stated rate of 8%. The market rate is 10%. The note will be paid in three equal annual installments of $62,085 on each December 31 (which is the accounting year-end for the borrower).

Required

Note: Round your answer to the nearest whole dollar.

Please avoid answers in image thank you

a. Compute the cash received by the borrower.
b. Prepare a debt amortization schedule.
Note: Round each amount in the table to the nearest whole dollar.
Note: Use a negative sign for the "Reduction in N.P." amounts.
Date
Jan. 1, Year 1
Dec. 31, Year 1 $
Dec. 31, Year 2 $
Dec. 31, Year 3 $
Total
$
Date
Jan. 1, Year 1
Dec. 31, Year 1
Dec. 31, Year 2
Cash
Dec. 31, Year 3
Interest Expense Reduction in N.P. Carrying Value
$
$
$
0 $
c. Provide the required entries for the borrower for the issuance of the note on January 1, Year 1, and the interest payments on
December 31 of Year 1, Year 2, and Year 3.
Note: Round your answer to the nearest whole dollar.
To record issuance of note.
Account Name
To record interest payment.
$
$
To record interest payment.
$
0 $
To record interest payment.
0
$
$
S
$
0
<< <
Dr.
Cr.

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