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Entries for installment Note Transactions On January 1, Year 1, Bryson Company obtained a $71,000, four-year, 11% installment note from Campbell Bank. The note requires annual payments of $22,885, beginning on December 31, Year 1. a. Prepare an amortization table for this installment note, similar to the one presented in Exhibit 4. Note: Round the computation of the interest expense to the nearest whole dollar. Enter all amounts as positive numbers. In Year 4, round the amount in the Decrease in Notes Payable column either up or down to ensure that the Carrying Amount zeroes out. Amortization of Installment Notes Year Interest Expense (11 of January 1 Note Carrying December January 1 Carrying out Note Payment (Cash Paid) Decrease in Notes Payable Carrying b. Journalize the entries for the issuance of the note and the four annual note payments. Note: For a compound transaction, if an amount box does not require an entry, leave it blank. For the Year 4 entry (due to rounding), adjust Notes Payable up or down to ensure that debits equal credits. www. c. How will the annual note payment be reported in the Year 1 income statement? of $ would be reported on the income statement Times interest earned The following data were taken from recent annual reports of Caliber Company, which operates a low-fare airline service to more than 50 cities in the United States: Current Year Preceding Year Interest expense Income before income tax $40,000 208,000 $44,000 162,800 a. Determine the times interest earned ratio for the current and preceding years. Round to one decimal place. Current year Preceding year b. Although Caliber Company had enough earnings to pay interest in the preceding year, the in this ratio will be by the debtholders

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