# ABDJanuary 1CarryingInterest Expense (6% ofJanuary 1 Note CarryingAmount)December 31Decrease inYear EndingNotes Payable(B – C)\$ 4,258Note Payment(Cash Paid)\$ 5,698CarryingAmount (A – D)December 31Amount\$ 1,440(6% of \$24,000)(6% of \$19,742)\$24,00020Y4\$19,74220Y55,6984,51319,7421,18515,229(6% of \$15,229)20Υ65,69815,2299144,78410,445(6% of \$10,445)20Υ710,4455,6986275,0715,3745,698\$28,490324* (6% of \$5,374)20Υ85,3745,374\$4,490\$24,000*Rounded (\$5,374 – \$5,698).

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On January 1, Year 1, Bryson Company obtained a \$147,750, four-year, 7% installment note from Campbell Bank. The note requires annual payments of \$43,620, beginning on December 31, Year 1.
a. Prepare an amortization table for this installment note, similar to the one presented in Exhibit 4.
b. Journalize the entries for the issuance of the note and the four annual note payments.
c. Describe how the annual note payment would be reported in the Year 1 income statement.

Exhibit 4 Attached

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Step 1

a.

Step 2
Step 3

b.

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