On January 1, 2018, Brown Co. borrowed cash from First Bank by issuing a $74,500 face value, four-year term note that had an 9 percent
On January 1, 2018, Brown Co. borrowed cash from First Bank by issuing a $74,500 face value, four-year term note that had an 9 percent annual interest rate. The note is to be repaid by making annual cash payments of $22,996 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 $37,250 cash per year.
Required a. Prepare an amortization schedule for the four-year period. (Round your answers to the nearest whole dollar amount.) BROWN CO. Amortization Schedule Cash Payments Applied to December 31 Interest Year Principal Balance on January 1 Applied to Principal Principal Balance End of Period 2018 2019 2020 2021 b. Organize the information in accounts under an accounting equation. (Round your answers to the nearest whole dollar amount. Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles / Retained Earnings, leave the cell blank.) BROWN CO. Effect of Events on the Accounting Equation 2018, 2019, 2020 and 2021 Assets Liabilities + Stockholders' Equity Cash + Land = Notes + Retained Payable * Earnings Event Accounts Titles / Retained Earnings 2018 + + + + + + + + Salaries expense + Rent revenue Interest expense + + + + + + III + + 12/31 12/31 Bal. 2019 Beg. bal. 12/31 12/31 End. bal. 2020 Beg. bal. 12/31 12/31 End. bal. 2021 Beg. bal. 12/31 12/31 End. bal. + + + + + + + + + + + + + + + + c. Prepare an income statement, a balance sheet, and a statement of cash flows for each of the four years. Complete this question by entering your answers in the tabs below. Reg C Inc Stmt Reg C Bal Sheet Req C CF Stmt Prepare the income statement for each of the four years. (Round your answers to the nearest whole dollar amount.) BROWN CO. Income Statement For the Year Ended December 31 2018 2019 2020 2021 Reg Cinc Stmt ReqC Bal Sheet > Reg C Inc Stmt Reg C Bal Sheet Reg C CF Stmt Prepare the balance sheet for each of the four years. (Round your answers to the nearest whole dollar amount.) BROWN CO. Balance Sheet As of December 31 2018 2019 2020 2021 Assets Total assets Liabilities Total liabilities Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity Prepare the statement of cash flows for each of the four years. (Round your answers to the nearest whole dollar amount. Amounts to be deducted should be indicated with a minus sign.) BROWN CO. Statement of Cash Flows For the Year Ended December 31 2018 2019 Cash flows from operating activities 2020 2021 Net cash flow from operating activities Cash flows from investing activities Net cash flows from investing activities Cash flows from financing activities Net cash flows from financing activities Net change in cash Ending cash balance Required information [The following information applies to the questions displayed below.) On January 1, 2018, Brown Co. borrowed cash from First Bank by issuing a $74,500 face value, four-year term note that had an 9 percent annual interest rate. The note is to be repaid by making annual cash payments of $22,996 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 $37,250 cash per year. d. Does cash outflow from operating activities remain constant or change each year? Remains constant Changes each year
