Entries for Installment Note Transactions

On January 1, Year 1, Bryson Company obtained a $22,000, four-year, 12% installment note from Campbell Bank. The note requires annual payments of $7,243, beginning on December 31, Year 1.

Question Content Area

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

Note: Enter all amounts to the nearest whole dollar. Round Year 4 Interest Expense (up or down) to ensure the carrying amount is zero at the end of the note term.

Amortization of Installment Notes
Year Ending December 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 6cc114f8df92fd7_1		$fill in the blank 6cc114f8df92fd7_2		$fill in the blank 6cc114f8df92fd7_3		$fill in the blank 6cc114f8df92fd7_4		$fill in the blank 6cc114f8df92fd7_5
Year 2		fill in the blank 6cc114f8df92fd7_6		fill in the blank 6cc114f8df92fd7_7		fill in the blank 6cc114f8df92fd7_8		fill in the blank 6cc114f8df92fd7_9		fill in the blank 6cc114f8df92fd7_10
Year 3		fill in the blank 6cc114f8df92fd7_11		fill in the blank 6cc114f8df92fd7_12		fill in the blank 6cc114f8df92fd7_13		fill in the blank 6cc114f8df92fd7_14		fill in the blank 6cc114f8df92fd7_15
Year 4		fill in the blank 6cc114f8df92fd7_16		fill in the blank 6cc114f8df92fd7_17		fill in the blank 6cc114f8df92fd7_18		fill in the blank 6cc114f8df92fd7_19		fill in the blank 6cc114f8df92fd7_20
				$fill in the blank 6cc114f8df92fd7_21		$fill in the blank 6cc114f8df92fd7_22		$fill in the blank 6cc114f8df92fd7_23

Question Content Area

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 PayableCashInterest ExpenseInterest PayableNotes PayableNotes Receivable	- Select -
	Accounts PayableCashInterest ExpenseInterest PayableNotes PayableNotes Receivable		- Select -
Year 1 Dec. 31	Accounts PayableCashInterest ExpenseInterest PayableInterest ReceivableNotes Receivable	- Select -	- Select -
	Accounts PayableCashInterest PayableInterest ReceivableNotes PayableNotes Receivable	- Select -	- Select -
	Accounts PayableCashInterest ExpenseInterest PayableNotes PayableNotes Receivable	- Select -	- Select -
Year 2 Dec. 31	Accounts PayableCashInterest ExpenseInterest PayableInterest ReceivableNotes Receivable	- Select -	- Select -
	Accounts PayableCashInterest PayableInterest ReceivableNotes PayableNotes Receivable	- Select -	- Select -
	Accounts PayableCashInterest ExpenseInterest PayableNotes PayableNotes Receivable	- Select -	- Select -
Year 3 Dec. 31	Accounts PayableCashInterest ExpenseInterest PayableInterest ReceivableNotes Receivable	- Select -	- Select -
	Accounts PayableCashInterest PayableInterest ReceivableNotes PayableNotes Receivable	- Select -	- Select -
	Accounts PayableCashInterest ExpenseInterest PayableNotes PayableNotes Receivable	- Select -	- Select -
Year 4 Dec. 31	Accounts PayableCashInterest ExpenseInterest PayableInterest ReceivableNotes Receivable	- Select -	- Select -
	Accounts PayableCashInterest PayableInterest ReceivableNotes PayableNotes Receivable	- Select -	- Select -
	Accounts PayableCashInterest ExpenseInterest PayableNotes PayableNotes Receivable	- Select -	- Select -

Question Content Area

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

Interest expenseNotes payable

of $fill in the blank 26a791ffdfd9fa1_2 would be reported on the income statement.