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1-Complete the chart for the first three months of the loan.

2-Assume that the borrower made a $1,000.00 payment, all toward principal, on July 1, 2022.

3-Complete the next line of the chart for the next payment, being sure to note the due date.

4-Prepare all relevant journal entries

5-Calculate total interest on the loan (assuming that the 7/1 extra payment was not made, assume that all loan payments were made as planned)

Problem-with extra principal payments

On April 1, 2022 Alexander Company purchased a new company car. The company put $2,000 cash down and took a loan for $15,000 at 6%, five years, with monthly payments of $289.99

(Work to two decimal places here)

Journal Entry for Purchase Date: (then continue to next page)

Prepare an Amortization Schedule (6%, five years)

Date	Beginning Loan Balance	(Debit) Interest Expense	(Debit) Notes Payable	(Credit) Cash	Ending Balance
4/1/2022	0				15,000.00
4/30/2022				289.99
5/31/2022				289.99
6/30/2022				289.99
What if you wanted to try to pay this off more quickly? What if you paid an extra $1,000 on 7/1/2022? What happens with that payment? When will your next payment be due?
7/1/2022				1,000.00
??				??

Continue to next page for journal entries

Make journal entry for first three payments

Journal Entry for 4/30/2022

Dr. Interest Expense

Dr. Notes Payable

Cr Cash 289.99

Journal Entry for 5/31/2022

Dr. Interest Expense

Dr. Notes Payable

Cr Cash 289.99

Journal Entry for 6/30/2022

Dr. Interest Expense

Dr. Notes Payable

Cr Cash 289.99

Journal Entry for 7/1/2022 extra payment

Journal Entry for next payment after the extra payment

On what date will the next payment be due?

What is the journal entry?

Continue.

Calculate total interest on this loan, assuming that no extra payments were made. Assume that all monthly loan payments were made for the five years of the loan.

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