Question
6. On January 1, 2021, Pharoah Corp. borrows $17,400 by signing a 3-year, 6% note payable. The note is repayable in three annual fixed principal
6. On January 1, 2021, Pharoah Corp. borrows $17,400 by signing a 3-year, 6% note payable. The note is repayable in three annual fixed principal payments on December 31 of each year.
Calculate the annual principal payment.
Annual principal payment | $enter the Annual principal payment in dollars |
Prepare an instalment payment schedule for the note.
Period | Cash payment | Interest Expense | Reduction of Principal | Principal Balance | ||||
---|---|---|---|---|---|---|---|---|
Jan. 1, 2021 | $enter a dollar amount | $enter a dollar amount | $enter a dollar amount | $enter a dollar amount | ||||
Dec. 31, 2021 | enter a dollar amount | enter a dollar amount | enter a dollar amount | enter a dollar amount | ||||
Dec. 31, 2022 | enter a dollar amount | enter a dollar amount | enter a dollar amount | enter a dollar amount | ||||
Dec. 31, 2023 | enter a dollar amount | enter a dollar amount | enter a dollar amount | enter a dollar amount |
Prepare journal entries to record the note and the first instalment payment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Date | Account Titles and Explanation | Debit | Credit |
---|---|---|---|
Jan. 1, 2021 | enter an account title to record issuance of note on January 1 | enter a debit amount | enter a credit amount |
enter an account title to record issuance of note on January 1 | enter a debit amount | enter a credit amount | |
(To record issuance of note.) | |||
Dec. 31, 2021 | enter an account title to record payment on note on December 31 | enter a debit amount | enter a credit amount |
enter an account title to record payment on note on December 31 | enter a debit amount | enter a credit amount | |
enter an account title to record payment on note on December 31 | enter a debit amount | enter a credit amount | |
(To record payment on note.) |
What amounts would be reported as current and non-current in the liabilities section of Pharoah's balance sheet at December 31, 2021?
Current liability | $enter a dollar amount | |
---|---|---|
Non-current liability | $enter a dollar amount |
Please answer as presented, thank you
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