WEEK SIX

On November 1, 2015, Norwood borrows $580,000 cash from a bank by signing a five-year installment note bearing 5% interest. The note requires equal total payments each year on October 31. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.)

Required:
1.	Complete the below table to calculate the total amount of each installment payment.

Initial Cash Proceeds		PV Factor		Amount of annual payment
$580,000		4.3295	=	$133,965

2.	Complete an amortization table for this installment note. (Round your intermediate calculations to the nearest dollar amount.)

Period Ending Date	Beginning Balance	Debit Interest Expense	+ Debit Notes Payable	= Credit Cash	Ending Balance
10/31/2016				$133,965
10/31/2017				133,965
10/31/2018				133,965
10/31/2019				133,965
10/31/2020
Total				$535,860

3.	Prepare the journal entries in which Norwood records the following:

(a)	Accrued interest as of December 31, 2015 (the end of its annual reporting period).

No

Date

General Journal

Debit

Credit

1

Dec 31, 2015

Interest expense

1

Interest payable

(b)

The first annual payment on the note.

No

Date

General Journal

Debit

Credit

1

Oct 31, 2016

Interest expense

1

Interest payable

1

Notes payable

1

Cash

PLEASE ANSWER ALL QUESTIONS CORRECTLY AND FILL IN EVERY BLANK!!!