Tony’s favorite memories of his childhood were the times hespent with his dad at...

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Accounting

Tony’s favorite memories of his childhood were the times hespent with his dad at camp. Tony was daydreaming of those days abit as he and Suzie jogged along a nature trail and came across awonderful piece of property for sale. He turned to Suzie and said,“I’ve always wanted to start a camp where families could get awayand spend some quality time together. If we just had the money, Iknow this would be the perfect place.” On November 1, 2022, GreatAdventures purchased the land by issuing a $590,000, 6%, 10-yearinstallment note to the seller. Payments of $6,550 are required atthe end of each month over the life of the 10-year loan. Eachmonthly payment of $6,550 includes both interest expense andprincipal payments (i.e., reduction of the loan amount).

Late that night Tony exclaimed, “We now have land for our new camp;this has to be the best news ever!” Suzie said, “There’s somethingelse I need to tell you. I’m expecting!” They decided right then,if it was a boy, they would name him Venture.
Required:
1. Complete the first three rows of anamortization schedule.

2. & 3. Record the purchase of land withthe issuance of a long-term note payable on November 1, 2022, andthe first two payments on November 30, 2022, and December 31, 2022,and calculate the remaining balance of the note payable as ofDecember 31, 2022. (If no entry is required for aparticular transaction, select "No Journal Entry Required" in thefirst account field.)

4. The 12 monthly payments in 2023 (followingyear) will reduce the note’s balance by an additional $44,856. Howwould the remaining balance of the note payable be reported in thebalance sheet as of December 31, 2022?

Answer & Explanation Solved by verified expert

4.3 Ratings (619 Votes)

Date		Cash Paid$(a)	Interest Expenses $(b)	Decrease in Carrying Value$(a-b)=C	Carrying Value $(After adjusted value derived under C)	Principal ($)(a)	Interest part(6%)(b=6%*a)	Monthly Interest Cost($)(b/12
Nov12022	Purchased The land				5,90,000	5,90,000	35,400	2,950
End of Nov 2022		6,550	2,950	3,600	5,86,400	5,86,400	35,184	2,932
End of Dec 2022		6,550	2,932	3,618	5,82,782

Journal Entries	Particular	Debit($)	Credit($)
Nov12022	Cash	5,90,000
	Note Payable		5,90,000

End of Nov 2022	Interest Expenses	2,950
	Note Payable	3,600
	Cash		6,550

End of Dec 2022	Interest Expenses	2,932
	Note Payable	3,618
	Cash		6,550

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In: AccountingTony’s favorite memories of his childhood were the times hespent with his dad at camp....Tony’s favorite memories of his childhood were the times hespent with his dad at camp. Tony was daydreaming of those days abit as he and Suzie jogged along a nature trail and came across awonderful piece of property for sale. He turned to Suzie and said,“I’ve always wanted to start a camp where families could get awayand spend some quality time together. If we just had the money, Iknow this would be the perfect place.” On November 1, 2022, GreatAdventures purchased the land by issuing a $590,000, 6%, 10-yearinstallment note to the seller. Payments of $6,550 are required atthe end of each month over the life of the 10-year loan. Eachmonthly payment of $6,550 includes both interest expense andprincipal payments (i.e., reduction of the loan amount).Late that night Tony exclaimed, “We now have land for our new camp;this has to be the best news ever!” Suzie said, “There’s somethingelse I need to tell you. I’m expecting!” They decided right then,if it was a boy, they would name him Venture.Required:1. Complete the first three rows of anamortization schedule.2. & 3. Record the purchase of land withthe issuance of a long-term note payable on November 1, 2022, andthe first two payments on November 30, 2022, and December 31, 2022,and calculate the remaining balance of the note payable as ofDecember 31, 2022. (If no entry is required for aparticular transaction, select "No Journal Entry Required" in thefirst account field.)4. The 12 monthly payments in 2023 (followingyear) will reduce the note’s balance by an additional $44,856. Howwould the remaining balance of the note payable be reported in thebalance sheet as of December 31, 2022?