A B D January 1 Carrying Interest Expense (6% of January 1 Note Carrying Amount) December 31 Decrease in Year Ending Notes Payable (B – C) $ 4,258 Note Payment (Cash Paid) $ 5,698 Carrying Amount (A – D) December 31 Amount $ 1,440 (6% of $24,000) (6% of $19,742) $24,000 20Y4 $19,742 20Y5 5,698 4,513 19,742 1,185 15,229 (6% of $15,229) 20Υ6 5,698 15,229 914 4,784 10,445 (6% of $10,445) 20Υ7 10,445 5,698 627 5,071 5,374 5,698 $28,490 324* (6% of $5,374) 20Υ8 5,374 5,374 $4,490 $24,000 *Rounded ($5,374 – $5,698).
A B D January 1 Carrying Interest Expense (6% of January 1 Note Carrying Amount) December 31 Decrease in Year Ending Notes Payable (B – C) $ 4,258 Note Payment (Cash Paid) $ 5,698 Carrying Amount (A – D) December 31 Amount $ 1,440 (6% of $24,000) (6% of $19,742) $24,000 20Y4 $19,742 20Y5 5,698 4,513 19,742 1,185 15,229 (6% of $15,229) 20Υ6 5,698 15,229 914 4,784 10,445 (6% of $10,445) 20Υ7 10,445 5,698 627 5,071 5,374 5,698 $28,490 324* (6% of $5,374) 20Υ8 5,374 5,374 $4,490 $24,000 *Rounded ($5,374 – $5,698).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On January 1, Year 1, Bryson Company obtained a $147,750, four-year, 7% installment note from Campbell Bank. The note requires annual payments of $43,620, beginning on December 31, Year 1.
a. Prepare an amortization table for this installment note, similar to the one presented in Exhibit 4.
b.
c. Describe how the annual note payment would be reported in the Year 1 income statement.
Exhibit 4 Attached
Transcribed Image Text:A
B
D
January 1
Carrying
Interest Expense (6% of
January 1 Note Carrying
Amount)
December 31
Decrease in
Year Ending
Notes Payable
(B – C)
$ 4,258
Note Payment
(Cash Paid)
$ 5,698
Carrying
Amount (A – D)
December 31
Amount
$ 1,440
(6% of $24,000)
(6% of $19,742)
$24,000
20Y4
$19,742
20Y5
5,698
4,513
19,742
1,185
15,229
(6% of $15,229)
20Υ6
5,698
15,229
914
4,784
10,445
(6% of $10,445)
20Υ7
10,445
5,698
627
5,071
5,374
5,698
$28,490
324* (6% of $5,374)
20Υ8
5,374
5,374
$4,490
$24,000
*Rounded ($5,374 – $5,698).
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 8 steps with 8 images
Knowledge Booster
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.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education