Question
On January 1 of Year 1, Bryson Company obtained a $197,000, 4-year, 5% installment note from Campbell Bank. The note requires annual payments of $55,556,
On January 1 of Year 1, Bryson Company obtained a $197,000, 4-year, 5% installment note from Campbell Bank. The note requires annual payments of $55,556, beginning on December 31 of Year 1.
Required:
a. Prepare a table for this installment note, similar to the one presented in Exhibit 4. | |
b. Journalize the entries for the issuance of the note and the four annual note payments. | |
c. Describe how the annual note payment would be reported on the Year 1 income statement. |
a. Prepare a table for this installment note, similar to the one presented in Exhibit 4.
Additional Instructions
Amortization of Installment Notes | |||||
| A | B | C | D | E |
For the Year Ending Dec. 31 | January 1 Carrying Amount | Note Payment | Interest Expense | Decrease in Notes Payable | Dec. 31 Carrying Amount |
Year 1 | |||||
Year 2 | |||||
Year 3 | |||||
Year 4 | |||||
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