a)
Long-term notes payable: Long-term notes payable represent a legal and written promise made by the business to pay a debt with interest over a period of more than a year. It is reported under the long-term liability section of the
Installment note: It is a debt in which the borrower is required to pay equal periodic payments to the lender based on the term of the note.
Amortization Schedule: An amortization schedule is a table that shows the details of each loan payment allocated between the principal amount and the overdue interest along with the beginning and ending balance of the loan. From the amortization schedule of the loan, the periodical interest expense, total interest expense and total payment made are known.
To prepare: An amortization table for the installment note.
b)
To Journalize: The issuance of the installment note for cash.
To Journalize: The first annual payment on the note.
To Journalize: The second annual payment on the note.
To Journalize: The third annual payment on the note.
To Journalize: The fourth annual payment on the note.
c)
To describe: How the annual note payment would be reported in the 2016 income statement.
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