Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. entries for installment note transactions on janua

Entries for Installment Note Transactions On January 1, Year 1, Bryson Company obtained a $26,000, four-year, 12%...

Free

90.2K

Verified Solution

Question

Accounting

Entries for Installment Note Transactions

On January 1, Year 1, Bryson Company obtained a $26,000,four-year, 12% installment note from Campbell Bank. The noterequires annual payments of $8,560, beginning on December 31, Year1.

a. Prepare an amortization table for thisinstallment note, similar to the one presented in Exhibit 4.

Note: Round the computation of the interestexpense to the nearest whole dollar. Enter all amounts as positivenumbers. In Year 4, round the amount in the Decrease in NotesPayable column either up or down to ensure that theCarrying Amount zeroes out.

b. Journalize the entries for the issuance ofthe note and the four annual note payments.

Note: For a compound transaction, if an amount box doesnot require an entry, leave it blank. For the Year 4 entry (due torounding), adjust Notes Payable up or down to ensure thatdebits equal credits.

c. How will the annual note payment be reported in the Year 1income statement?
  of $ would be reported on the income statement.

Answer & Explanation Solved by verified expert
3.9 Ratings (599 Votes)

Req a:
Amort Chrt
Year Payment Interest Principal balance
Repayment Outstanding at end
01.01Yr1 26000
31.12Yr1 8560 3120 5440 20560
31.12 Yr2 8560 2467 6093 14467
31.12 Yr3 8560 1736 6824 7643
31.12.Yr4 8560 917 7643 0
Req b:
Journal entries:
Date Accounts title and explanations Debit $ Credit $
Jan 01YR1 Cash account 26000
    Notes payable 26000
Dec31 Yr1 Notes payable 5440
Interest expense 3120
   Cash account 8560
Dec31 Yr2 Notes payable 6093
Interest expense 2467
   Cash account 8560
Dec31 Yr3 Notes payable 6824
Interest expense 1736
   Cash account 8560
Dec31 Yr4 Notes payable 7643
Interest expense 917
   Cash account 8560
Req c:
Interest expense of $ 3120 would be reported in Income Statemente

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Algebra
1.2K views

7 y 2x 10 y 4x 8 8 y x 4 y 3x 4

Finance
1.2K views

In 150 words do you think it is more difficult for a manager to control direct...

Medical Sciences
1.2K views

Write 3 paragraphs describing the valves in the heart, and name all 4 valves and where...

Physics
1.2K views

In a rectangular coordinate system, a positive point charge q = 8.00 nC is placed at...

Advance Math
1.2K views

. During droughts, water for irrigation is pumped from the ground. When ground water is pumped...

Accounting
1.2K views

Sally Smith is a new client for 2015. As you requested, she provided you with copies...

Biology
1.2K views

Which has an older TMRCA the human mitochondrial genome O the human y chromosome alleles...

Accounting
1.2K views

Please Help me answer all been struggling on it keep getting...

Accounting
1.2K views

Net sales for the year were $1,350,000 and cost of goods sold was $1,026,000 for...

Accounting
1.2K views

The manager of Ingrid Ltd is preparing their budget for the upcoming fiscal quarter, commencing...

Accounting
1.2K views

Prepare the journal entry to record income tax expense, deferre fincome taxes, and income taxes...

Accounting
1.2K views

Video-Technical, Inc. sells a single product for $600 per unit, including a 60-day warranty against...