Murphy Company purchased a new machine for $120,000 on December 31, 2020. They obtained a loan at the bank to finance the purchase. The terms of the loan were: 5 years, 5% interest, annual payments of principal and interest on December 31 of each year. a. Using the table provided, calculate the annual payment on the loan. b. Record the purchase of the new machine on December 31, 2020. c. Record the loan payment on December 31, 2021. d. Record the loan payment on December 31, 2022. d. Calculate the loan balance for December 31, 2022 after the payment. a. Using the table below, calculate the annual payment on the loan. Loan Amount $1,200.00 Annual Int. Rate 5.0% # of Payments 5 Monthly Payment - YrPaymentPrincipalInterestEnding Balance 1-#VALUE!#VALUE!- 2---- 3---- 4---- 5---- General Journal DateAccount Debit Credit 2020 b.31-Dec $120,000 $120,000 2021 c.31-Dec $24,000 $6,000 $30,000 2022 d31-Dec $24,000 $6,000 $30,000

In this problem loan amount is $ 120,000 tobe repaid in 5 equal installments…

Answered: Murphy Company purchased a new machine…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 12EA: Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank...

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	Murphy Company purchased a new machine for $120,000 on December 31, 2020. They obtained a loan
	at the bank to finance the purchase. The terms of the loan were: 5 years, 5% interest, annual payments
	of principal and interest on December 31 of each year.

	a. Using the table provided, calculate the annual payment on the loan.

	b. Record the purchase of the new machine on December 31, 2020.

	c. Record the loan payment on December 31, 2021.

	d. Record the loan payment on December 31, 2022.

	d. Calculate the loan balance for December 31, 2022 after the payment.

a. Using the table below, calculate the annual payment on the loan.
Loan Amount		$1,200.00
Annual Int. Rate		5.0%
# of Payments		5
Monthly Payment		-

Yr	Payment	Principal	Interest	Ending Balance
1	-	#VALUE!	#VALUE!	-
2	-	-	-	-
3	-	-	-	-
4	-	-	-	-
5	-	-	-	-

General Journal
	Date	Account	Debit		Credit
	2020
b.	31-Dec		$120,000
					$120,000


	2021
c.	31-Dec		$24,000
			$6,000
					$30,000

	2022
d	31-Dec		$24,000
			$6,000
					$30,000

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