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The following journal entry was made by your predecessor to record the annual payment on a 5%, 10-year installment note. PAGE 22   JOURNAL     DATE DESCRIPTION POST. REF. DEBIT CREDIT 1 Oct. 1 Interest Expense 710 152,086.00   2   Notes Payable 215 550,476.00   3   Cash 110   702,562.00       Using the information provided, compute the following amounts. 1. What was the carrying amount (book value) of the installment note before the payment on October 1?     2. What portion of next year’s payment will be interest? (Round the amount to the nearest dollar.)

The following journal entry was made by your predecessor to record the annual payment on a 5%, 10-year installment note. PAGE 22   JOURNAL     DATE DESCRIPTION POST. REF. DEBIT CREDIT 1 Oct. 1 Interest Expense 710 152,086.00   2   Notes Payable 215 550,476.00   3   Cash 110   702,562.00       Using the information provided, compute the following amounts. 1. What was the carrying amount (book value) of the installment note before the payment on October 1?     2. What portion of next year’s payment will be interest? (Round the amount to the nearest dollar.)

FINANCIAL ACCOUNTING
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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The following journal entry was made by your predecessor to record the annual payment on a 5%, 10-year installment note.
PAGE 22
 
JOURNAL
 
  DATE DESCRIPTION POST. REF. DEBIT CREDIT
1
Oct. 1
Interest Expense
710
152,086.00
 
2
 
Notes Payable
215
550,476.00
 
3
 
Cash
110
 
702,562.00
 
 
 
Using the information provided, compute the following amounts.
1. What was the carrying amount (book value) of the installment note before the payment on October 1?
 
 
2. What portion of next year’s payment will be interest? (Round the amount to the nearest dollar.)
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