On January 1, Year 1, Bryson Company obtained a $55,000, four-year, 11% installment note from Campbell Bank. The note requires annual payments of $17,728, 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
Year 2
Year 3
Year 4

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
Year 1 Dec. 31
Year 2 Dec. 31
Year 3 Dec. 31
Year 4 Dec. 31

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

(Interest expense/Notes payable) of ________ would be reported on the income statement.