Entries for issuing installment note transactions One the first day of the fiscal year, Harris Company borrowed $65,000 by giving a 10-year, 6% installment note to Cuba Bank. The note requires annual payments of $8,832, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $3,900 and principal repayment of $4,932. a. Journalize the entries to record the following: 1. Issued the installment note for cash on the first day of the fiscal year. 2. Paid the first annual payment on the note. b. Explain how the notes payable would be reported on the balance sheet at the end of the first year.
Entries for issuing installment note transactions One the first day of the fiscal year, Harris Company borrowed $65,000 by giving a 10-year, 6% installment note to Cuba Bank. The note requires annual payments of $8,832, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $3,900 and principal repayment of $4,932. a. Journalize the entries to record the following: 1. Issued the installment note for cash on the first day of the fiscal year. 2. Paid the first annual payment on the note. b. Explain how the notes payable would be reported on the balance sheet at the end of the first year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Entries for issuing installment note transactions
One the first day of the fiscal year, Harris Company borrowed $65,000 by giving a 10-year, 6% installment note to Cuba Bank. The note requires annual payments of $8,832, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $3,900 and principal repayment of $4,932.
a. Journalize the entries to record the following:
1. Issued the installment note for cash on the first day of the fiscal year.
2. Paid the first annual payment on the note.
b. Explain how the notes payable would be reported on the balance sheet at the end of the first year.
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