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A partial amortization schedule for a 10-year note payable issued on January 1, Year 1,...

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Accounting

A partial amortization schedule for a 10-year note payable issued on January 1, Year 1, is shown next:

Accounting Period Principal Balance January 1 Cash Payment Applied to Interest Applied to Principal
Year 1 $ 380,000 $ 49,212 $ 19,000 $ 30,212
Year 2 349,788 49,212 17,489 31,723
Year 3 318,065 49,212 15,903 33,309

Required a. Using a financial statements model like the one shown next, record the appropriate amounts for the following two events:

  1. (1) January 1, Year 1, issue of the note payable.

  2. (2) December 31, Year 1, payment on the note payable.

b. If the company earned $98,000 cash revenue and paid $63,000 in cash expenses in addition to the interest in Year 1, what is the amount of each of the following?

  1. (1) Net income for Year 1.

  2. (2) Cash flow from operating activities for Year 1.

  3. (3) Cash flow from financing activities for Year 1.

c. What is the amount of interest expense on this loan for Year 4?

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