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A B D January 1 Carrying Interest Expense (6% of January 1 Note Carrying Amount) December 31 Decrease in Year Ending Notes Payable (B – C) $ 4,258 Note Payment (Cash Paid) $ 5,698 Carrying Amount (A – D) December 31 Amount $ 1,440 (6% of $24,000) (6% of $19,742) $24,000 20Y4 $19,742 20Y5 5,698 4,513 19,742 1,185 15,229 (6% of $15,229) 20Υ6 5,698 15,229 914 4,784 10,445 (6% of $10,445) 20Υ7 10,445 5,698 627 5,071 5,374 5,698 $28,490 324* (6% of $5,374) 20Υ8 5,374 5,374 $4,490 $24,000 *Rounded ($5,374 – $5,698).

A B D January 1 Carrying Interest Expense (6% of January 1 Note Carrying Amount) December 31 Decrease in Year Ending Notes Payable (B – C) $ 4,258 Note Payment (Cash Paid) $ 5,698 Carrying Amount (A – D) December 31 Amount $ 1,440 (6% of $24,000) (6% of $19,742) $24,000 20Y4 $19,742 20Y5 5,698 4,513 19,742 1,185 15,229 (6% of $15,229) 20Υ6 5,698 15,229 914 4,784 10,445 (6% of $10,445) 20Υ7 10,445 5,698 627 5,071 5,374 5,698 $28,490 324* (6% of $5,374) 20Υ8 5,374 5,374 $4,490 $24,000 *Rounded ($5,374 – $5,698).

Corporate Financial Accounting
Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter10: Liabilities: Current, Installment Notes, And Contingencies
Section: Chapter Questions
Problem 10.1BE: Proceeds from notes payable On January 26, Nyree Co. borrowed cash from Conrad Bank by issuing a...
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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

A B D January 1 Carrying Interest Expense (6% of January 1 Note Carrying Amount) December 31 Decrease in Year Ending Notes Payable (B – C) $ 4,258 Note Payment (Cash Paid) $ 5,698 Carrying Amount (A – D) December 31 Amount $ 1,440 (6% of $24,000) (6% of $19,742) $24,000 20Y4 $19,742 20Y5 5,698 4,513 19,742 1,185 15,229 (6% of $15,229) 20Υ6 5,698 15,229 914 4,784 10,445 (6% of $10,445) 20Υ7 10,445 5,698 627 5,071 5,374 5,698 $28,490 324* (6% of $5,374) 20Υ8 5,374 5,374 $4,490 $24,000 *Rounded ($5,374 – $5,698).
Transcribed Image Text:A B D January 1 Carrying Interest Expense (6% of January 1 Note Carrying Amount) December 31 Decrease in Year Ending Notes Payable (B – C) $ 4,258 Note Payment (Cash Paid) $ 5,698 Carrying Amount (A – D) December 31 Amount $ 1,440 (6% of $24,000) (6% of $19,742) $24,000 20Y4 $19,742 20Y5 5,698 4,513 19,742 1,185 15,229 (6% of $15,229) 20Υ6 5,698 15,229 914 4,784 10,445 (6% of $10,445) 20Υ7 10,445 5,698 627 5,071 5,374 5,698 $28,490 324* (6% of $5,374) 20Υ8 5,374 5,374 $4,490 $24,000 *Rounded ($5,374 – $5,698).
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