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September 4: You purchase a vehicle for yourbusiness for $55,000 and finance the vehicle...

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Accounting

September 4: You purchase a vehicle for yourbusiness for $55,000 and finance the vehicle at a rate of 5% for 6years. First monthly payment is due on October 4. You will need tocreate a loan amortization schedule to determine the amount of themonthly note and the interest expense for each month. Whenrecording journal entries, round all amounts to the nearestdollar.

Recording Purchase:

9/4/2018

Vehicles

55000

Notes Payable (long-term)

55000

9/30/18 You accrued interest on the note.Accrue interest based on the number of days in the month (verifiedas correct):

9/30/2018

Interest Expense

191.00

Interest Payable

191.00

The question is to journalthese:

10/4     You makethe first monthly payment to Pig E Banks by issuing check #106.

10/30   You accrued intereston the Pig E. Bank note. Accrue interest based on the number ofdays in the month.

Answer & Explanation Solved by verified expert
3.6 Ratings (444 Votes)

Below is schedule-

No

 Date Payment Interest Principal Balance
MM-DD-YYYY
Loan: 09-04-2018 0 0 0 55,000.00
1 10-04-2018 885.77 229.17 656.6 54,343.40
2 11-04-2018 885.77 226.43 659.34 53,684.06
3 12-04-2018 885.77 223.68 662.09 53,021.97
4 01-04-2019 885.77 220.92 664.85 52,357.12
5 02-04-2019 885.77 218.15 667.62 51,689.50
6 03-04-2019 885.77 215.37 670.4 51,019.10
7 04-04-2019 885.77 212.58 673.19 50,345.91
8 05-04-2019 885.77 209.77 676 49,669.91
9 06-04-2019 885.77 206.96 678.81 48,991.10
10 07-04-2019 885.77 204.13 681.64 48,309.46
11 08-04-2019 885.77 201.29 684.48 47,624.98
12 09-04-2019 885.77 198.44 687.33 46,937.65
13 10-04-2019 885.77 195.57 690.2 46,247.45
14 11-04-2019 885.77 192.7 693.07 45,554.38
15 12-04-2019 885.77 189.81 695.96 44,858.42
16 01-04-2020 885.77 186.91 698.86 44,159.56
17 02-04-2020 885.77 184 701.77 43,457.79
18 03-04-2020 885.77 181.07 704.7 42,753.09
19 04-04-2020 885.77 178.14 707.63 42,045.46
20 05-04-2020 885.77 175.19 710.58 41,334.88
21 06-04-2020 885.77 172.23 713.54 40,621.34
22 07-04-2020 885.77 169.26 716.51 39,904.83
23 08-04-2020 885.77 166.27 719.5 39,185.33
24 09-04-2020 885.77 163.27 722.5 38,462.83
25 10-04-2020 885.77 160.26 725.51 37,737.32
26 11-04-2020 885.77 157.24 728.53 37,008.79
27 12-04-2020 885.77 154.2 731.57 36,277.22
28 01-04-2021 885.77 151.16 734.61 35,542.61
29 02-04-2021 885.77 148.09 737.68 34,804.93
30 03-04-2021 885.77 145.02 740.75 34,064.18
31 04-04-2021 885.77 141.93 743.84 33,320.34
32 05-04-2021 885.77 138.83 746.94 32,573.40
33 06-04-2021 885.77 135.72 750.05 31,823.35
34 07-04-2021 885.77 132.6 753.17 31,070.18
35 08-04-2021 885.77 129.46 756.31 30,313.87
36 09-04-2021 885.77 126.31 759.46 29,554.41
37 10-04-2021 885.77 123.14 762.63 28,791.78
38 11-04-2021 885.77 119.97 765.8 28,025.98
39 12-04-2021 885.77 116.77 769 27,256.98
40 01-04-2022 885.77 113.57 772.2 26,484.78
41 02-04-2022 885.77 110.35 775.42 25,709.36
42 03-04-2022 885.77 107.12 778.65 24,930.71
43 04-04-2022 885.77 103.88 781.89 24,148.82
44 05-04-2022 885.77 100.62 785.15 23,363.67
45 06-04-2022 885.77 97.35 788.42 22,575.25
46 07-04-2022 885.77 94.06 791.71 21,783.54
47 08-04-2022 885.77 90.76 795.01 20,988.53
48 09-04-2022 885.77 87.45 798.32 20,190.21
49 10-04-2022 885.77 84.13 801.64 19,388.57
50 11-04-2022 885.77 80.79 804.98 18,583.59
51 12-04-2022 885.77 77.43 808.34 17,775.25
52 01-04-2023 885.77 74.06 811.71 16,963.54
53 02-04-2023 885.77 70.68 815.09 16,148.45
54 03-04-2023 885.77 67.29 818.48 15,329.97
55 04-04-2023 885.77 63.87 821.9 14,508.07
56 05-04-2023 885.77 60.45 825.32 13,682.75
57 06-04-2023 885.77 57.01 828.76 12,853.99
58 07-04-2023 885.77 53.56 832.21 12,021.78
59 08-04-2023 885.77 50.09 835.68 11,186.10
60 09-04-2023 885.77 46.61 839.16 10,346.94
61 10-04-2023 885.77 43.11 842.66 9,504.28
62 11-04-2023 885.77 39.6 846.17 8,658.11
63 12-04-2023 885.77 36.08 849.69 7,808.42
64 01-04-2024 885.77 32.54 853.23 6,955.19
65 02-04-2024 885.77 28.98 856.79 6,098.40
66 03-04-2024 885.77 25.41 860.36 5,238.04
67 04-04-2024 885.77 21.83 863.94 4,374.10
68 05-04-2024 885.77 18.23 867.54 3,506.56
69 06-04-2024 885.77 14.61 871.16 2,635.40
70 07-04-2024 885.77 10.98 874.79 1,760.61
71 08-04-2024 885.77 7.34 878.43 882.18
72 09-04-2024 885.86 3.68 882.18 0
Journal entry for the accrued interest from 1st october to 4th october
Debit Credit
10-04-2018 Interest expense $          38.17
Interest payable $                  38.17
Journal entry for the 1st installment payment
10-04-2018 Interest Payable $        229.17
Note Payable (Loan term) $        656.60
To Bank $                885.77
Journal Entry for the Accrued interest
30-10-2018 Interest expense $        188.69
Interest payable $                188.69

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Transcribed Image Text

In: AccountingSeptember 4: You purchase a vehicle for yourbusiness for $55,000 and finance the vehicle at...September 4: You purchase a vehicle for yourbusiness for $55,000 and finance the vehicle at a rate of 5% for 6years. First monthly payment is due on October 4. You will need tocreate a loan amortization schedule to determine the amount of themonthly note and the interest expense for each month. Whenrecording journal entries, round all amounts to the nearestdollar.Recording Purchase:9/4/2018Vehicles55000Notes Payable (long-term)550009/30/18 You accrued interest on the note.Accrue interest based on the number of days in the month (verifiedas correct):9/30/2018Interest Expense191.00Interest Payable191.00The question is to journalthese:10/4     You makethe first monthly payment to Pig E Banks by issuing check #106.10/30   You accrued intereston the Pig E. Bank note. Accrue interest based on the number ofdays in the month.

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