Required information Problem 10-26A (Algo) Effect of an installment note on financial statements LO 10-1 [The following information applies to the questions displayed below] On January 1, Year 1, Brown Company borrowed cash from First Bank by issuing a $102,000 face-value, four-year term note that had an 7 percent annual interest rate. The note is to be repaid by making annual cash payments of $30,113 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $54.000 cash per year.
Required information Problem 10-26A (Algo) Effect of an installment note on financial statements LO 10-1 [The following information applies to the questions displayed below] On January 1, Year 1, Brown Company borrowed cash from First Bank by issuing a $102,000 face-value, four-year term note that had an 7 percent annual interest rate. The note is to be repaid by making annual cash payments of $30,113 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $54.000 cash per year.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Vinubhai
![Required information.
Problem 10-26A (Algo) Effect of an installment note on financial statements LO 10-1
[The following information applies to the questions displayed below]
On January 1, Year 1, Brown Company borrowed cash from First Bank by issuing a $102,000 face-value, four-year term
note that had an 7 percent annual interest rate. The note is to be repaid by making annual cash payments of $30,113 that
include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land
that generated rental revenues of $54,000 cash per year.
Problem 10-26A (Algo) Part a
Required
6. Prepare an amortization schedule for the four-year period (Round intermediate calculations to nearest dollar amount. Round your
answers to the nearest dollar amount.)
Year
Year 1
Year 2
Year 3
Year 4
BROWN COMPANY
Amortization Schedule
$102,000, 4-Year Term Note, 7% Interest Rate -
Principal
Balance
on January 1
Cash Payment Applied to Applied to
December 31 Interest
Principal
Principal
Balance
End of Period](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F54fafca2-4b19-42e1-b57a-4faba095a1ec%2F74d279d2-b939-48e6-bb03-7198461c6976%2Faaz0pfn_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information.
Problem 10-26A (Algo) Effect of an installment note on financial statements LO 10-1
[The following information applies to the questions displayed below]
On January 1, Year 1, Brown Company borrowed cash from First Bank by issuing a $102,000 face-value, four-year term
note that had an 7 percent annual interest rate. The note is to be repaid by making annual cash payments of $30,113 that
include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land
that generated rental revenues of $54,000 cash per year.
Problem 10-26A (Algo) Part a
Required
6. Prepare an amortization schedule for the four-year period (Round intermediate calculations to nearest dollar amount. Round your
answers to the nearest dollar amount.)
Year
Year 1
Year 2
Year 3
Year 4
BROWN COMPANY
Amortization Schedule
$102,000, 4-Year Term Note, 7% Interest Rate -
Principal
Balance
on January 1
Cash Payment Applied to Applied to
December 31 Interest
Principal
Principal
Balance
End of Period
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