The following amortization schedule indicates the interest and principal to be repaid on an installment note established January 1, 2021, for a company with a March 31 fiscal year-end. Period 1/1-12/31, Year 1 1/1-12/31, Year 2 1/1-12/31, Year 3 1/1-12/31, Year 4 Total Beginning Notes Payable $ 28,000 21,207 14, 278 7,210 Interest Expense $ 560 424 286 144 1,414 Repaid Principal on Notes Payable $ 6,793 6,929 7,068 7,210 28,000 Ending Notes Payable $ 21,207 14, 278 7,210 0 Required: 1. Assuming the company makes the required annual payments on December 31, use the amortization schedule to determine (a) the amount of the (rounded) annual payment; (b) the amount of Interest Expense to report in the year ended March 31, 2021; (c) the amount of Interest Expense to report in the year ended March 31, 2022; (d) the Notes Payable balance at January 1, 2024; and (e) the total interest and total principal paid over the note's entire life 2. Assuming the company makes adjustments at the end of each fiscal year, prepare the journal entries required on (a) January 1, 2021, and (b) March 31, 2021.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
### Instruction for Journal Entries

**Task Overview**
Assuming the company makes adjustments at the end of each fiscal year, prepare the journal entries required on:
- (a) January 1, 2021
- (b) March 31, 2021

**Important Note:**
If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.

**Journal Entry Worksheet**

**Step 1 of 2:**
Record the entry on January 1, 2021.

- **Instructions:**
  - Enter debits before credits.

**Table Format for Journal Entries**

| Transaction | General Journal | Debit | Credit |
|-------------|-----------------|-------|--------|
| (a)         |                 |       |        |
|             |                 |       |        |
|             |                 |       |        |
|             |                 |       |        |
|             |                 |       |        |
|             |                 |       |        |

**Additional Features**
- A button labeled "View transaction list" is available for further details on transactions. 
- Navigation arrows allow you to move between different tasks or journal entry steps.
Transcribed Image Text:### Instruction for Journal Entries **Task Overview** Assuming the company makes adjustments at the end of each fiscal year, prepare the journal entries required on: - (a) January 1, 2021 - (b) March 31, 2021 **Important Note:** If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. **Journal Entry Worksheet** **Step 1 of 2:** Record the entry on January 1, 2021. - **Instructions:** - Enter debits before credits. **Table Format for Journal Entries** | Transaction | General Journal | Debit | Credit | |-------------|-----------------|-------|--------| | (a) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | **Additional Features** - A button labeled "View transaction list" is available for further details on transactions. - Navigation arrows allow you to move between different tasks or journal entry steps.
The following amortization schedule indicates the interest and principal to be repaid on an installment note established January 1, 2021, for a company with a March 31 fiscal year-end.

| Period                  | Beginning Notes Payable | Interest Expense | Repaid Principal on Notes Payable | Ending Notes Payable |
|-------------------------|------------------------|------------------|----------------------------------|----------------------|
| 1/1–12/31, Year 1       | $28,000                | $560             | $6,793                           | $21,207              |
| 1/1–12/31, Year 2       | 21,207                 | 424              | 6,929                            | 14,278               |
| 1/1–12/31, Year 3       | 14,278                 | 286              | 7,068                            | 7,210                |
| 1/1–12/31, Year 4       | 7,210                  | 144              | 7,210                            | 0                    |
| **Total**               |                        | **1,414**        | **28,000**                       |                      |

**Required:**

1. Assuming the company makes the required annual payments on December 31, use the amortization schedule to determine:
   - (a) the amount of the (rounded) annual payment;
   - (b) the amount of Interest Expense to report in the year ended March 31, 2021;
   - (c) the amount of Interest Expense to report in the year ended March 31, 2022;
   - (d) the Notes Payable balance at January 1, 2024; and
   - (e) the total interest and total principal paid over the note’s entire life.

2. Assuming the company makes adjustments at the end of each fiscal year, prepare the journal entries required on:
   - (a) January 1, 2021, and
   - (b) March 31, 2021.
Transcribed Image Text:The following amortization schedule indicates the interest and principal to be repaid on an installment note established January 1, 2021, for a company with a March 31 fiscal year-end. | Period | Beginning Notes Payable | Interest Expense | Repaid Principal on Notes Payable | Ending Notes Payable | |-------------------------|------------------------|------------------|----------------------------------|----------------------| | 1/1–12/31, Year 1 | $28,000 | $560 | $6,793 | $21,207 | | 1/1–12/31, Year 2 | 21,207 | 424 | 6,929 | 14,278 | | 1/1–12/31, Year 3 | 14,278 | 286 | 7,068 | 7,210 | | 1/1–12/31, Year 4 | 7,210 | 144 | 7,210 | 0 | | **Total** | | **1,414** | **28,000** | | **Required:** 1. Assuming the company makes the required annual payments on December 31, use the amortization schedule to determine: - (a) the amount of the (rounded) annual payment; - (b) the amount of Interest Expense to report in the year ended March 31, 2021; - (c) the amount of Interest Expense to report in the year ended March 31, 2022; - (d) the Notes Payable balance at January 1, 2024; and - (e) the total interest and total principal paid over the note’s entire life. 2. Assuming the company makes adjustments at the end of each fiscal year, prepare the journal entries required on: - (a) January 1, 2021, and - (b) March 31, 2021.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Accounting for Notes
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education