A partial amortization schedule for a 10-year note payable issued on January 1, 2013, is shown below:

Required
a. Using a financial statements model like the one shown here, record the appropriate amounts for the following two events:
(1) January 1, 2013, issue of the note payable.
(2) December 31, 2013, payment on the note payable.

b. If the company earned $60,000 cash revenue and paid $42,000 in cash expenses in addition to the interest in 2013, what is the amount of each of the following?
(1) Net income for 2013.
(2) Cash flow from operating activities for 2013.
(3) Cash flow from financing activities for 2013.
c. What is the amount of interest expense on this loan for2016?

Transcribed Image Text:

Accounting Period Principal Balance January 1 Cash Payment Applied to Interest Applied to Principal 2013 2014 2015 $100,000 83,039 65,060 $22,961 22,961 22,961 $6,000 4,982 3,904 S16,961 17,979 19,057 Event No. Assets = Liab. + Equity Rev. Exp. Net Inc. Cash Flow =