On January 1, 2016, Brown Co. borrowed cash from First Bank by issuing a $104,000 face value, four-year term note that had an 8 percent annual interest rate. The note is to be repaid by making annual cash payments of $31,400 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $56,000 cash per year. A.Prepare an amortization schedule for the four-year period. B. Prepare an income statement, balance sheet, and statement of cash flows for each of the four years. (Hint: Record the transactions for each year in T-accounts before preparing the financial statements.

On January 1, 2016, Brown Co. borrowed cash from First Bank by issuing a $104,000 face value, four-year term note that had an 8 percent annual interest rate. The note is to be repaid by making annual cash payments of $31,400 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $56,000 cash per year. A.Prepare an amortization schedule for the four-year period. B. Prepare an income statement, balance sheet, and statement of cash flows for each of the four years. (Hint: Record the transactions for each year in T-accounts before preparing the financial statements.

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter14: Long-term Liabilities: Bonds And Notes

Section: Chapter Questions

Problem 11E

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Required information [The following information applies to the questions displayed below.] On January 1, 2018, Brown Co. borrowed cash from First Bank by issuing a $100,000 face value, four-year term note that had an 8 percent annual interest rate. The note is to be repaid by making annual cash payments of $30,192 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $52,000 cash per year. Required a. Prepare an amortization schedule for the four-year period. (Round your answers to the nearest whole dollar amount.) BROWN CO. Amortization Schedule Principal Balance on January 1 Principal Balance End Cash Applied to Interest Applied to Principal Year Payments December 31 of Period 2018 2019 2020 2021