Installment note Installment note is an obligation in which the defaulter needs to repay the investor total amount includes principal and interest on certain terms and conditions in a series of periodic payments. Effective interest rate of amortization bond Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate. To Prepare: The journal entry to lending the funds for the Incorporation AFS as on January 1, 2018.

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Answer 1

Question

Chapter 14, Problem 14.20E

(1)

To determine

Installment note

Installment note is an obligation in which the defaulter needs to repay the investor total amount includes principal and interest on certain terms and conditions in a series of periodic payments.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To Prepare: The journal entry to lending the funds for the Incorporation AFS as on January 1, 2018.

(2)

To determine

To Prepare: The amortization schedule for three year term of the installment note.

(3)

To determine

To prepare: The journal entry for the first installment payment on December 31, 2018.

(4)

To determine

To Prepare: The journal entry for the third installment payment on December 31, 2020.

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Answer 2

Question

Chapter 14, Problem 14.20E

(1)

To determine

Installment note

Installment note is an obligation in which the defaulter needs to repay the investor total amount includes principal and interest on certain terms and conditions in a series of periodic payments.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To Prepare: The journal entry to lending the funds for the Incorporation AFS as on January 1, 2018.

(2)

To determine

To Prepare: The amortization schedule for three year term of the installment note.

(3)

To determine

To prepare: The journal entry for the first installment payment on December 31, 2018.

(4)

To determine

To Prepare: The journal entry for the third installment payment on December 31, 2020.

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Answer 3

Question

Chapter 14, Problem 14.20E

(1)

To determine

Installment note

Installment note is an obligation in which the defaulter needs to repay the investor total amount includes principal and interest on certain terms and conditions in a series of periodic payments.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To Prepare: The journal entry to lending the funds for the Incorporation AFS as on January 1, 2018.

(2)

To determine

To Prepare: The amortization schedule for three year term of the installment note.

(3)

To determine

To prepare: The journal entry for the first installment payment on December 31, 2018.

(4)

To determine

To Prepare: The journal entry for the third installment payment on December 31, 2020.

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Answer 4

Question

Chapter 14, Problem 14.20E

(1)

To determine

Installment note

Installment note is an obligation in which the defaulter needs to repay the investor total amount includes principal and interest on certain terms and conditions in a series of periodic payments.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To Prepare: The journal entry to lending the funds for the Incorporation AFS as on January 1, 2018.

(2)

To determine

To Prepare: The amortization schedule for three year term of the installment note.

(3)

To determine

To prepare: The journal entry for the first installment payment on December 31, 2018.

(4)

To determine

To Prepare: The journal entry for the third installment payment on December 31, 2020.

Expert Solution & Answer

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Answer 5

Chapter 14, Problem 14.20E

(1)

To determine

Installment note

Installment note is an obligation in which the defaulter needs to repay the investor total amount includes principal and interest on certain terms and conditions in a series of periodic payments.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To Prepare: The journal entry to lending the funds for the Incorporation AFS as on January 1, 2018.

(2)

To determine

To Prepare: The amortization schedule for three year term of the installment note.

(3)

To determine

To prepare: The journal entry for the first installment payment on December 31, 2018.

(4)

To determine

To Prepare: The journal entry for the third installment payment on December 31, 2020.

Answer 6

Chapter 14, Problem 14.20E

(1)

To determine

Installment note

Installment note is an obligation in which the defaulter needs to repay the investor total amount includes principal and interest on certain terms and conditions in a series of periodic payments.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To Prepare: The journal entry to lending the funds for the Incorporation AFS as on January 1, 2018.

Answer 7

Chapter 14, Problem 14.20E

(1)

To determine

Installment note

Installment note is an obligation in which the defaulter needs to repay the investor total amount includes principal and interest on certain terms and conditions in a series of periodic payments.

Effective interest rate of amortization bond

Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.

To Prepare: The journal entry to lending the funds for the Incorporation AFS as on January 1, 2018.

Answer 8

(2)

To determine

To Prepare: The amortization schedule for three year term of the installment note.

Answer 9

(2)

To determine

To Prepare: The amortization schedule for three year term of the installment note.

Answer 10

(3)

To determine

To prepare: The journal entry for the first installment payment on December 31, 2018.

Answer 11

(3)

To determine

To prepare: The journal entry for the first installment payment on December 31, 2018.

Answer 12

(4)

To determine

To Prepare: The journal entry for the third installment payment on December 31, 2020.

Answer 13

(4)

To determine

To Prepare: The journal entry for the third installment payment on December 31, 2020.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 14 - How is periodic interest determined for...Ch. 14 - As a general rule, how should long-term...Ch. 14 - How are bonds and notes the same? How do they...Ch. 14 - What information is contained in a bond indenture?...Ch. 14 - On January 1, 2018, Brandon Electronics issued 85...Ch. 14 - How is the price determined for a bond (or bond...Ch. 14 - A zero-coupon bond pays no interest. Explain.Ch. 14 - Prob. 14.8Q Ch. 14 - Compare the two commonly used methods of...Ch. 14 - Prob. 14.10Q

Solution Summary: The author explains that an installment note is an obligation in which the defaulter needs to repay the investor in a series of periodic payments.

To Prepare: The amortization schedule for three year term of the installment note.

To prepare: The journal entry for the first installment payment on December 31, 2018.

To Prepare: The journal entry for the third installment payment on December 31, 2020.

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Chapter 14 Solutions