Entries for Installment Note Transactions

On January 1 of Year 1, Bryson Company obtained a $147,750, four-year, 7% installment note from Campbell Bank. The note requires annual payments of $43,620, beginning on December 31 of Year 1.

a. Prepare an amortization table for this installment note, similar to the one presented in Exhibit 4. Round the computation of the interest expense to the nearest whole dollar. Enter all amounts as positive numbers. (Note: Due to rounding, the Year 4 Interest expense is provided.)

Amortization of Installment Notes

For the Year Ending Dec. 31

January 1 Carrying Amount

Note Payment (Cash Paid)

Interest Expense (7% of January 1 Note Carrying Amount)

Decrease in Notes Payable

December 31 Carrying Amount

Year 1

$fill in the blank 49078202900d04b_1

$fill in the blank 49078202900d04b_2

$fill in the blank 49078202900d04b_3

$fill in the blank 49078202900d04b_4

$fill in the blank 49078202900d04b_5

Year 2

fill in the blank 49078202900d04b_6

fill in the blank 49078202900d04b_7

fill in the blank 49078202900d04b_8

fill in the blank 49078202900d04b_9

fill in the blank 49078202900d04b_10

Year 3

fill in the blank 49078202900d04b_11

fill in the blank 49078202900d04b_12

fill in the blank 49078202900d04b_13

fill in the blank 49078202900d04b_14

fill in the blank 49078202900d04b_15

Year 4

fill in the blank 49078202900d04b_16

fill in the blank 49078202900d04b_17

fill in the blank 49078202900d04b_18

fill in the blank 49078202900d04b_19

fill in the blank 49078202900d04b_20

$fill in the blank 49078202900d04b_21

$fill in the blank 49078202900d04b_22

$fill in the blank 49078202900d04b_23

b. Journalize the entries for the issuance of the note and the four annual note payments. For a compound transaction, if an amount box does not require an entry, leave it blank.

Year 1 Jan. 1		fill in the blank e9a947ff705ffe3_2	fill in the blank e9a947ff705ffe3_3
		fill in the blank e9a947ff705ffe3_5	fill in the blank e9a947ff705ffe3_6
Year 1 Dec. 31		fill in the blank e9a947ff705ffe3_8	fill in the blank e9a947ff705ffe3_9
		fill in the blank e9a947ff705ffe3_11	fill in the blank e9a947ff705ffe3_12
		fill in the blank e9a947ff705ffe3_14	fill in the blank e9a947ff705ffe3_15
Year 2 Dec. 31		fill in the blank e9a947ff705ffe3_17	fill in the blank e9a947ff705ffe3_18
		fill in the blank e9a947ff705ffe3_20	fill in the blank e9a947ff705ffe3_21
		fill in the blank e9a947ff705ffe3_23	fill in the blank e9a947ff705ffe3_24
Year 3 Dec. 31		fill in the blank e9a947ff705ffe3_26	fill in the blank e9a947ff705ffe3_27
		fill in the blank e9a947ff705ffe3_29	fill in the blank e9a947ff705ffe3_30
		fill in the blank e9a947ff705ffe3_32	fill in the blank e9a947ff705ffe3_33
Year 4 Dec. 31		fill in the blank e9a947ff705ffe3_35	fill in the blank e9a947ff705ffe3_36
		fill in the blank e9a947ff705ffe3_38	fill in the blank e9a947ff705ffe3_39
		fill in the blank e9a947ff705ffe3_41	fill in the blank e9a947ff705ffe3_42

c. How will the annual note payment be reported in the Year 1 income statement? of $fill in the blank b67cf607bff9fe4_2 would be reported on the income statement.