Accounting Method

Part A 6 marks Cousins Ltd borrows $500,000 from the Bell Bank on 1st July 20X1. The loan is secured by a mortgage over real estate. The term of the loan is three years with a fixed compound interest of 6% per annum. The loan is repaid in 6 monthly instalments of interest and principal with the first instalment occurring on 31st December 20X1. These instalments are each $92,299 (to the nearest dollar). Required: (a) A partially completed loan repayment schedule for the entire loan is provided below. Complete the schedule by inserting the correct numbers in the eight (8) vacant shaded cells. Round numbers to the nearest whole dollar. 3 marks Opening Loan Instalment Interest Instalment Principal Closing Loan Balance Paid Component Reduction Balance Date $ $ $ $ 31/12/X1 500,000 92,299 15,000 77,299 422,701 30/06/X2 422,701 92,299 12,681 79,618 343,083 31/12/X2 343,083 92,299 10,292 261,076 30/06/X3 261,076 92,299 84,467 176,609 31/12/X3 176,609 92,299 [ 30/06/X4 92,296* [ 0 * = last payment amount reflects prior roundings. (b) Prepare the general journal entry for the receipt of the loan. Narrations are not required. 1 mark Date Accounts DR CR C [ [ (e) Prepare the general journal entry for the loan instalment paid on 30/6/20X2. Narrations are not required. 2 marks