1. Entries for A debt that requires the borrower to make equal periodic payments to the lender for the term of the note.Installment Note Transactions

   On January 1, Year 1, Bryson Company obtained a $71,000, four-year, 11% installment note from Campbell Bank. The note requires annual payments of $22,885, beginning on December 31, Year 1.

   a. Prepare an amortization table for this installment note, similar to the one presented in Exhibit 4.

   Note: Round the computation of the interest expense to the nearest whole dollar. Enter all amounts as positive numbers. In Year 4, round the amount in the Decrease in Notes Payable column either up or down to ensure that the Carrying Amount zeroes out.

   Amortization of Installment Notes
   Year Ending December 31	January 1 The balance of the bonds payable account (face amount of the bonds) less any unamortized discount or plus any unamortized premium.Carrying Amount			Note Payment (Cash Paid)			Interest Expense (11% of January 1 Note Carrying Amount)					Decrease in Notes Payable			December 31 Carrying Amount
   Year 1	$			$			$					$			$
   Year 2
   Year 3
   Year 4															0
   				$			$					$

   b. Journalize the entries for the issuance of the note and the four annual note payments.

   Note: For a compound transaction, if an amount box does not require an entry, leave it blank. For the Year 4 entry (due to rounding), adjust Notes Payable up or down to ensure that debits equal credits.

   Year 1 Jan. 1	Accounts Payable Cash Interest Expense Interest Payable Notes Payable Notes Receivable
   	Accounts Payable Cash Interest Expense Interest Payable Notes Payable Notes Receivable
   Year 1 Dec. 31	Accounts Payable Cash Interest Expense Interest Payable Interest Receivable Notes Receivable
   	Accounts Payable Cash Interest Payable Interest Receivable Notes Payable Notes Receivable
   	Accounts Payable Cash Interest Expense Interest Payable Notes Payable Notes Receivable
   Year 2 Dec. 31	Accounts Payable Cash Interest Expense Interest Payable Interest Receivable Notes Receivable
   	Accounts Payable Cash Interest Payable Interest Receivable Notes Payable Notes Receivable
   	Accounts Payable Cash Interest Expense Interest Payable Notes Payable Notes Receivable
   Year 3 Dec. 31	Accounts Payable Cash Interest Expense Interest Payable Interest Receivable Notes Receivable
   	Accounts Payable Cash Interest Payable Interest Receivable Notes Payable Notes Receivable
   	Accounts Payable Cash Interest Expense Interest Payable Notes Payable Notes Receivable
   Year 4 Dec. 31	Accounts Payable Cash Interest Expense Interest Payable Interest Receivable Notes Receivable
   	Accounts Payable Cash Interest Payable Interest Receivable Notes Payable Notes Receivable
   	Accounts Payable Cash Interest Expense Interest Payable Notes Payable Notes Receivable

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   c. How will the annual note payment be reported in the Year 1 income statement?

   • Interest expense
   • Notes payable
   of $ would be reported on the income statement