Question
A partial amortization schedule for a 10-year note payable issued on January 1, Year 1, is shown next: Accounting Period Principal Balance January 1 Cash
A partial amortization schedule for a 10-year note payable issued on January 1, Year 1, is shown next: Accounting Period Principal Balance January 1 Cash Payment Applied to Interest Applied to Principal Year 1 $ 330,000 $ 49,180 $ 26,400 $ 22,780 Year 2 307,220 49,180 24,578 24,602 Year 3 282,618 49,180 22,609 26,571 Required Using a financial statements model, record the appropriate amounts for the following two events: (1) January 1, Year 1, issue of the note payable. (2) December 31, Year 1, payment on the note payable. If the company earned $88,000 cash revenue and paid $58,000 in cash expenses in addition to the interest in Year 1, what is the amount of each of the following? (1) Net income for Year 1. (2) Cash flow from operating activities for Year 1. (3) Cash flow from financing activities for Year 1. What is the amount of interest expense on this loan for Year 4?
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