Tony's favorite memories of his childhood were the times he spent with his dad at camp. Tony was daydreaming of those days a bit as he and Suzie jogged along a nature trail and came across a wonderful piece of property for sale. He turned to Suzie and said, "I've always wanted to start a camp where families could get away and spend some quality time together. If we just had the money, I know this would be the perfect place." On November 1, 2025, Great Adventures purchased the land by issuing a $580,000, 6%, 8-year installment note to the seller. Payments of $7,622 are required at the end of each month over the life of the 8-year loan. Each monthly payment of $7,622 includes both interest expense and principal payments (i.e., reduction of the loan amount). Late that night, Tony exclaimed, "We now have land for our new camp; this has to be the best news ever!" Suzie said, "There's something else I need to tell you. I'm expecting!" Required: 1. Complete the first three rows of an amortization schedule. 2. Record the purchase of land with the issuance of a long-term note payable on November 1, 2025. 3-a. Record the first two payments on November 30, 2025, and December 31, 2025. 3-b. Calculate the remaining balance of the note payable as of December 31, 2025. 4. The 12 monthly payments in 2026 (following year) will reduce the note's balance by an additional $58,833. Record the reclassification of this amount from Notes Payable (long-term) to Notes Payable (current).
Tony's favorite memories of his childhood were the times he spent with his dad at camp. Tony was daydreaming of those days a bit as he and Suzie jogged along a nature trail and came across a wonderful piece of property for sale. He turned to Suzie and said, "I've always wanted to start a camp where families could get away and spend some quality time together. If we just had the money, I know this would be the perfect place." On November 1, 2025, Great Adventures purchased the land by issuing a $580,000, 6%, 8-year installment note to the seller. Payments of $7,622 are required at the end of each month over the life of the 8-year loan. Each monthly payment of $7,622 includes both interest expense and principal payments (i.e., reduction of the loan amount). Late that night, Tony exclaimed, "We now have land for our new camp; this has to be the best news ever!" Suzie said, "There's something else I need to tell you. I'm expecting!" Required: 1. Complete the first three rows of an amortization schedule. 2. Record the purchase of land with the issuance of a long-term note payable on November 1, 2025. 3-a. Record the first two payments on November 30, 2025, and December 31, 2025. 3-b. Calculate the remaining balance of the note payable as of December 31, 2025. 4. The 12 monthly payments in 2026 (following year) will reduce the note's balance by an additional $58,833. Record the reclassification of this amount from Notes Payable (long-term) to Notes Payable (current).
Chapter19: Family Tax Planning
Section: Chapter Questions
Problem 11DQ
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Transcribed Image Text:Tony's favorite memories of his childhood were the times he spent with his dad at camp. Tony was daydreaming of those days a bit as
he and Suzie jogged along a nature trail and came across a wonderful piece of property for sale. He turned to Suzie and said, "I've
always wanted to start a camp where families could get away and spend some quality time together. If we just had the money, I know
this would be the perfect place." On November 1, 2025, Great Adventures purchased the land by issuing a $580,000, 6%, 8-year
installment note to the seller. Payments of $7,622 are required at the end of each month over the life of the 8-year loan. Each monthly
payment of $7,622 includes both interest expense and principal payments (i.e., reduction of the loan amount).
Late that night, Tony exclaimed, "We now have land for our new camp; this has to be the best news ever!" Suzie said, "There's
something else I need to tell you. I'm expecting!"
Required:
1. Complete the first three rows of an amortization schedule.
2. Record the purchase of land with the issuance of a long-term note payable on November 1, 2025.
3-a. Record the first two payments on November 30, 2025, and December 31, 2025.
3-b. Calculate the remaining balance of the note payable as of December 31, 2025.
4. The 12 monthly payments in 2026 (following year) will reduce the note's balance by an additional $58,833. Record the
reclassification of this amount from Notes Payable (long-term) to Notes Payable (current).
Transcribed Image Text:Record the purchase of land with the issuance of a long-term note payable.
Note: Enter debits before credits.
Date
November 01, 2025
General Journal
Debit
Credit
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