1. On January 1, 2018, Eagle borrows $35,000 cash by signing a four-year, 7% installment note. The note requires four equal payments of $10,333, consisting of accrued interest and principal on December 31 of each year from 2018 through 2021. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.)

Prepare an amortization table for this installment note. (Round all amounts to the nearest whole dollar.)

2. Ellis issues 8.5%, five-year bonds dated January 1, 2018, with a $420,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $428,517. The annual market rate is 8% on the issue date.

Required:

a. Complete the below table to calculate the total bond interest expense over the bonds' life.

b. Prepare a straight-line amortization table for the bonds life.

c. Prepare the journal entries to record the first two interest payments.

Answer is complete but not entirely correct. Payments Period Ending Date 2018 2019 2020 2021 Total Debit Notes Payable Debit Interest Ending Balance 43,750 Beginning Credit Balance Expense $ 35,00$ 1,583 1,583 1,583 1,583 $6,332 43,750 52,500 61,250 8,750 10,333 8,750 X$ 10,333 8,750 X$ 10,333 8,750$ 10,333 35,000 41,332 52,500 61,250