Entries for Installment Note Transactions

On January 1, 20Y2, Hebron Company issued a $52,000, 4-year, 11% installment note to Ventsam Bank. The note requires annual payments of $16,761, beginning on December 31, 20Y2.

Journalize the entries to record the following:

20Y2
Jan. 1	Issued the note for cash at its face amount.
Dec. 31	Paid the annual payment on the note, which consisted of interest of $5,720 and principal of $11,041.
20Y5
Dec. 31	Paid the annual payment on the note, included interest of $1,661. The remainder of the payment reduced the principal balance on the note.

Question Content Area

Issued the note for cash at its face amount. If an amount box does not require an entry, leave it blank.

20Y2 Jan. 1	Accounts PayableBonds PayableCashInterest ExpenseInterest PayableNotes Payable	- Select -	- Select -
	Accounts PayableBonds PayableCashInterest ExpenseInterest PayableNotes Payable	- Select -	- Select -

Question Content Area

Paid the annual payment on the note, which consisted of interest of $5,720 and principal of $11,041. If an amount box does not require an entry, leave it blank.

20Y2 Dec. 31	Accounts PayableBonds PayableCashInterest ExpenseInterest PayableInterest Receivable	- Select -	- Select -
	Accounts PayableBonds PayableCashInterest PayableNotes PayableNotes Receivable	- Select -	- Select -
	Accounts PayableBonds PayableCashInterest ExpenseInterest PayableNotes Payable	- Select -	- Select -

Question Content Area

Paid the annual payment on the note, included interest of $1,661. The remainder of the payment reduced the principal balance on the note. If an amount box does not require an entry, leave it blank.

20Y5 Dec. 31	Accounts PayableBonds PayableCashInterest ExpenseInterest PayableInterest Receivable	- Select -	- Select -
	Accounts PayableBonds PayableCashInterest PayableNotes PayableNotes Receivable	- Select -	- Select -
	Accounts PayableBonds PayableCashInterest ExpenseInterest PayableNotes Payable	- Select -	- Select -