Exercise 10-2A Amortization schedule for an installment note On January 1, 2011, Cobb Co. borrowed $80,000 cash from First Bank by issuing a four-year, 6 percent note. The principal and interest are to be paid by making annual payments in the amount of $23,087. Payments are to be made December 31 of each year, beginning December 31, 2011. Required Prepare an amortization schedule for the interest and principal payments for the four-year period. LO 1
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- Exercise Issuance and Interest Amortization for Zero Coupon Note (Straight Line) Kerwin Company borrowed $10,000 on a 2-year, zero coupon note. The note was issued on January 1, 2020. The face amount of the note, $12,544, is to be paid at maturity on December 31, 2021. Required: Assuming straight line amortization, calculate the interest expense for 2020 and 2021. Prepare the entries to recognize the borrowing, the first years interest expense, and the second years interest expense plus redemption of the note at maturity.EX 12-12 Entries for installment note transactions On January 1, 2016, 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 d bovi31, 2016. 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 2016 income statement. ini ns ni OBJ. 5Brief Exercise 10-18 Tamarisk, Inc. issues a $580,000, 10%, 10-year mortgage note on December 31, 2022, to obtain financing for a new building. The terms provide for annual installment payments of $94,392. Prepare the entry to record the mortgage loan on December 31, 2022, and the first installment payment on December 31, 2023. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31, 2022 Dec. 31, 2023
- Problem 14-5A (Algo) Installment notes LO C1 On January 1, 2021, Norwood borrows $540,000 cash from a bank by signing a five-year installment note bearing 7% interest. The note requires equal payments of $131,701 each year on December 31. Required: 1. Complete an amortization table for this installment note. 2. Prepare the journal entries in which Norwood records the following: (a) Norwood borrows $540,000 cash by signing a five-year, 7% installment note. (b) Record the first installment payment on December 31, 2021. (c) Record the second installment payment on December 31, 2022. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Complete an amortization table for this installment note. Note: Round your intermediate calculations to the nearest dollar amount. Period Ending Date Beginning Balance Debit Interest Expense Debit Notes Payable Credit Cash Ending Balance 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 TotalPROBLEM 8 On January 1, 2022, Clark Co. received a P3,000,000, 10% note from a customer upon the sale of its goods. The note is to be paid in six equal semi-annual installments, plus interest on the outstanding balance every June 30 and December 31, starting June 30, 2021. The effective rate on the note is 9%. 1. How much is the note upon initial recognition? 2. How much is the interest income recognized by Clark in 2022? 3. How much is the carrying amount of the note on December 31, 2023?EX 12-12 Entries for installment note transactions OBJ. 4 On January 1, 2016, 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, 2016. tho a. Prepare an amortization table for this installment note, similar to the one presented in Exhibit 4. ɔ. 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 2016 income statement.
- Problem 14-1The following amortization and interest schedule reflects the issuance of 10-year bonds by Waterway Corporation on January 1, 2011, and the subsequent interest payments and charges. The company’s year-end is December 31, and financial statements are prepared once yearly. Amortization Schedule year cash interest amount unamortized carrying value 1/1/2011 10,114 168,886 2011 19,690 20,266 9,538 169,462 2012 19,690 20,335 8,893 170,107 2013 19,690 20,413 8,170 170,830 2014 19,690 20,500 7,360 171,640 2015 19,690 20,597 6,453 172,547 2016 19,690 20,706 5,437 173,563 2017 19,690 20,828 4,299 174,701 2018 19,690 20,964 3,025 175,975 2019 19,690 21,117 1,598 177,402 2020 19,690 21,288 179,000 (c) Determine the stated interest rate and the effective-interest rate. (Round answers to 0 decimal places, e.g. 18%.) The stated rate The effective rate (d) On the basis of the schedule above, prepare the journal entry to record the issuance of the bonds…Problem 8-16 On March 1, 2019, Alpha Company borrowed P1,000,000 and signed a 2 year note bearing interest at 12% per anum compounded annually. Interest is payable in full at maturity on February 28,2021. 1. What amount should be reported as accrued interest payable on December 31, 2020? A. 100,000 B. 120,000 C. 232,000 D. 240,000Problem 24Safari Bank granted a loan to a borrower on Jan. 1, 2020. The interest on the loan is 8% payable annually starting Dec. 31,2020. The loan matures in three years on Dec. 31,2022. Data related to the loan are:Principal amount 1,500,000Origination fees charged against the borrower 50,000Direct Origination cost incurred 130,150After consideration of the origination fees charged against the borrower and the direct origination cost incurred, the effective rate on the loan is 6%. Required:1. Prepare a table of amortization for the loan receivable.2. Prepare the journal entries for 2020, 2021 and 2022.
- Problem 24Safari Bank granted a loan to a borrower on Jan. 1, 2020. The interest on the loan is 8% payable annually starting Dec. 31,2020. The loan matures in three years on Dec. 31,2022. Data related to the loan are:Principal amount 1,500,000Origination fees charged against the borrower 50,000Direct Origination cost incurred 130,150After consideration of the origination fees charged against the borrower and the direct origination cost incurred, the effective rate on the loan is 6%. Required:1. Compute the carrying amount of the loan receivable on December 31,2020, December 31,2021, December 31,2022.2. Prepare a table of amortization for the loan receivable.PART 1 Cucina Corp. signed a new installment note on January 1, 2018, and deposited the proceeds of $70,000 in its bank account. The note has a 3-year term, compounds 5 percent interest annually, and requires an annual installment payment on December 31. Cucina Corp. has a December 31 year-end and adjusts its accounts only at year-end. Required: Use an online application, such as the loan calculator with annual payments at mycalculators.com, to generate an amortization schedule. Enter that information into an amortization schedule with the following headings: Year, Beginning Notes Payable, Interest Expense, Repaid Principal on Notes Payable, and Ending Notes Payable. Prepare the journal entries on (a) January 1, 2018, and December 31 of (b) 2018, (c) 2019, and (d) 2020. If Cucina Corp.'s year-end were March 31, rather than December 31, prepare the adjusting journal entry would it make for this note on March 31, 2018? PART 1 REQUIRED 1 IN ATTACHED IMAGE Required 2 Prepare…4 Exercise 10-10 Installment note with equal total payments LO C1 On January 1, 2017, Eagle borrows $100,000 cash by signing a four-year, 7% installment note. The note requires four equal payments of $29,523, consisting of accrued interest and principal on December 31 of each year from 2017 through 2020. 2 points Prepare an amortization table for this installment note. (Round all amounts to the nearest whole dollar.) eBook Print Payments References (A) (B) (C) (D) (E) Period Ending Beginning Debit Interest Debit Notes Credit Ending Date Balance Expense Payable Cash Balance 2017 2018 2019 2020 Total $ 2$