On january 1, 2016, Brown co. borrowed cash from first bank issuing a $119,000 face value, four-year term note that had an 7 percent annual interest rate. The note is to be repaid by making annual cash payments of $35,132 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $71,000 cash per year.

Brown Co.

Amortization Schedule

$119,000, 4-Yr. term Note, 7% Interest Rate

Year Prin. Bal. on Jan. 1 Cash Pay. Dec. 31 Applied to interest Applied to Principal Prin. Bal. End of Period

2016

2017

2018

2019