a
Concept Introduction:
Installment note is an obligation that requires a series of payments to the lender, these notes are commonly issued for franchises and other businesses when lenders and borrowers agree to spread payments over time.
The computation of each of the four payments on account of notes.
b
Concept Introduction:
An installment note is an obligation that requires a series of payments to the lender, these notes are commonly issued for franchises and other businesses when lenders and borrowers agree to spread payments over time.
The year-end
c
Concept Introduction:
Installment note is an obligation that requires a series of payments to the lender, these notes are commonly issued for franchises and other businesses when lenders and borrowers agree to spread payments over time.
The
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FIN+MAN ACCOUNTING (LL) W/ ACCESS CODE
- On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10% interest rate. Each annual payment is in the amount of $39,569 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)arrow_forwardChemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms of the note show a maturity date of 36 months, and an annual interest rate of 8%. What is the accumulated interest entry if 9 months have passed since note establishment?arrow_forwardHalep Inc. borrowed $30,000 from Davis Bank and signed a 4-year note payable stating the interest rate was 4% compounded annually. Halep Inc. will make payments of $8,264.70 at the end of each year. Prepare an amortization table showing the principal and interest in each payment.arrow_forward
- Next Level Potter wishes to deposit a sum that at 12% interest, compounded semiannually, will permit 2 withdrawals: 40,000 at the end of 4 years and 50,000 at the end of 10 years. Analyze the problem to determine the required deposit, stating the procedure to follow and the tables to use in developing the solution.arrow_forwardComplete an amortization schedule for a $48,000 loan to be repaid in equal installments at the end of each of the next three years. The interest rate is 11% compounded annually. If an amount is zero, enter "0". Do not round intermediate calculations. Round your answers to the nearest cent. Beginning Repayment Ending Year Balance Payment Interest of Principal Balance 1 $ $ $ $ $ 2 3 What percentage of the payment represents interest and what percentage represents principal for each of the three years? Do not round intermediate calculations. Round your answers to two decimal places. % Interest % Principal Year 1: % % Year 2: % % Year 3: % % Why do these percentages change over time? These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as the remaining or outstanding balance declines. These…arrow_forwardOn January 1, McNeil Company borrows $151,000 cash by signing a four-year, 8% installment note. The note requires four equal payments consisting of accrued interest and principal on December 31 of each for the next four years. Required: 1. Compute the amount of each of the four equal payments. (Note: Use Table B.3 in Appendix B.) 2. Prepare an amortization table for this installment note. 3. Prepare the journal entries in which McNeil Company records the following: (a) McNeil Company borrows $151,000 cash by signing a four-year, 8% installment note. (b) Record the first payment on December 31, Year 1. (c) Record the last payment on December 31, Year 4. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A to 3C Prepare an amortization table for this installment note. Note: Round your intermediate calculations to the nearest dollar amount. Round your answer to the nearest whole dollars. Period Beginning Balance Debit Interest Expense Debit Notes Payable…arrow_forward
- Complete an amortization schedule for a $16,000 loan to be repaid in equal installments at the end of each of the next three years. The interest rate is 11% compounded annually. If an amount is zero, enter "0". Do not round intermediate calculations. Round your answers to the nearest cent. Beginning Repayment Ending Year Balance Payment Interest of Principal Balance 1 $ $ $ $ $ 2 3 What percentage of the payment represents interest and what percentage represents principal for each of the three years? Do not round intermediate calculations. Round your answers to two decimal places. % Interest % Principal Year 1: % % Year 2: % % Year 3: % % Why do these percentages change over time? These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as the remaining or outstanding balance declines. These…arrow_forwarda. Complete an amortization schedule for a $12,000 loan to be repaid in equal installments at the end of each of the next three years. The interest rate is 11% compounded annually. If an amount is zero, enter "0". Do not round intermediate calculations. Round your answers to the nearest cent. Beginning Repayment Ending Year Balance Payment Interest of Principal Balance $4 b. What percentage of the payment represents interest and what percentage represents principal for each of the three years? Do not round intermediate calculations. Round your answers to two decimal places. % Interest % Principal Year 1: % Year 2: % Year 3: % % %24 %24 %24 %24 3.arrow_forwardAccess an online loan calculator with annual payments, such as the one at mycalculators.com, to produce an amortization schedule for Welton Corporation's installment note that has original principal of $62,000, interest of 12% compounded annually, and a term of 3 years. Welton Corporation established the note on the first day of its fiscal year and will fully repay the note by the end of year 3 on its December 31 fiscal year-end. Prepare Welton Corporation's journal entries on (a) January 1, Year 1: (b) December 31, Year 1: (c) December 31, Year 2; and (d) December 31, Year 3. (If no entry is required for a transaction/event, select "No Journal Entry he nearest dollar Required" in the first account field. Do not round intermediate calculations. Round your final answer amount.) No 1 2 3 4 Transaction (a) (b) (c) (d) Cash Notes Payable (long-term) General Journal No Journal Entry Required Interest Expense Notes Payable (long-term) Cash Interest Expense Cash Answer is not complete. 33 Ⓡ O…arrow_forward
- prepare a three-year (monthly) amortization schedule to classify the notes payable into its current and long-term amounts. See October 1, 2020 transaction for details of loan. October 1 - Bought office equipment for $15,000 and signed a three-year promissory note with a local bank. The annual interest rate is 5%, with monthly payments of $449.56 beginning on November 1.arrow_forwardAccess an online loan calculator with annual payments, such as the one at mycalculators.com, to produce an amortization schedule for Welton Corporation's installment note that has original principal of $36,000, interest of 5% compounded annually, and a term of 3 years. Welton Corporation established the note on the first day of its fiscal year and will fully repay the note by the end of year 3 on its December 31 fiscal year-end. Prepare Welton Corporation's journal entries on (a) January 1, Year 1; (b) December 31, Year 1; (C) December 31, Year 2; and (d) December 31, Year 3. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest dollar amount.) View transaction list Journal entry worksheet 2 3 4 > Record the issuance of the note on January 1, Year 1. Note: Enter debits before credits. Transaction General Journal Debit Credit (a) Record entry Clear…arrow_forwardCrane Company issues a 12%, 5-year mortgage note on January 1, 2025, to obtain financing for new equipment. Land is used as collateral for the note. The terms provide for semiannual installment payments of $47,300. Click here to view the factor table What are the cash proceeds received from the issuance of the note? (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answer to 2 decimal places, e.g. 25.25.) Crane Company should receive $arrow_forward
- EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENTPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeIntermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning