Question: On January 1, 2016, Hebron Company issued a $175,000, five-year, 8% installment note to Ventsam Bank. The note requires annual payments of $43,380, beginning on
On January 1, 2016, Hebron Company issued a $175,000, five-year, 8% installment note to Ventsam Bank. The note requires annual payments of $43,380, beginning on December 31, 2016. Journalize the entries to record the following:
2016
Jan. 1. Issued the note for cash at its face amount.
Dec. 31. Paid the annual payment on the note, which consisted of interest of $14,000 and principal of $29,830.
2019
Dec. 31. Paid the annual payment on the note, included $6,253 of interest. The remainder of the payment reduced the principal balance on the note.
2016
Jan. 1. Issued the note for cash at its face amount.
Dec. 31. Paid the annual payment on the note, which consisted of interest of $14,000 and principal of $29,830.
2019
Dec. 31. Paid the annual payment on the note, included $6,253 of interest. The remainder of the payment reduced the principal balance on the note.
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