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Recording Entries for an Installment Note Payable On January 1, 2020, a borrower signed a long-term note, face amount, $100,000; time to maturity, three
Recording Entries for an Installment Note Payable On January 1, 2020, a borrower signed a long-term note, face amount, $100,000; time to maturity, three years; stated rate of interest, 8%. The market rate of interest of 10% determined the cash received by the borrower. The note will be paid in three equal annual installments of $38,803 each December 31 (which is also the end of the accounting period for the borrower). a. Note: Round your answer to the nearest whole dollar. 1. Compute the cash received by the borrower. $ 95,026 x 2. Prepare a debt amortization schedule. Note: Round each amount in the table to the nearest whole dollar. Note: Use a negative sign for the "Reduction in N.P." amounts. Date Cash Interest Expense Reduction in N.P. Carrying Value Jan. 1, 2020 $ 0 x Dec. 31, 2020 $ 38,803 $ 0 x $ 0 0 Dec. 31, 2021 38,803 0 x 0 0 x Dec. 31, 2022 38,803 0 0 x 0 Total $ 116,409 $ 0 x $ 0
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