On January 1, Year 1, Luzak Company issued a $71,000, 4-year, 11% installment note to McGee Bank. The note requires annual payments of $22,885, beginning on December 31, Year 1. Journalize the entries to record the following. Issued the notes for cash at its face amount. Paid the annual payment on the note, which consisted of interest of $7,810 and principal of $15,075. For a compound transaction, if an amount box does not require an entry, leave it blank. Paid the annual payment on the note, including $2,268 of interest. The remainder of the payment reduced the principal balance on the note. For a compound transaction, if an amount box does not require an entry, leave it blank.
Entries for Installment Note Transactions
On January 1, Year 1, Luzak Company issued a $71,000, 4-year, 11% installment note to McGee Bank. The note requires annual payments of $22,885, beginning on December 31, Year 1.
Journalize the entries to record the following.
Issued the notes for cash at its face amount.
Paid the annual payment on the note, which consisted of interest of $7,810 and principal of $15,075. For a compound transaction, if an amount box does not require an entry, leave it blank.
Paid the annual payment on the note, including $2,268 of interest. The remainder of the payment reduced the principal balance on the note. For a compound transaction, if an amount box does not require an entry, leave it blank.
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