Homework Answers
The journal entry to record the first installment payment is to debit the loan account and interst expense and to credit the cash account.
| Date | Particulars | Debit | Credit |
|---|---|---|---|
| 1 | Bank loan A/c. Dr. | 19,545.28 | |
| Interest expense A/c. Dr. | 5,400 | ||
| To Cash A/c | 24,945.28 |
Narration : Being Cash paid along with interest which is due for the first installment.
Note: Here, the cash payment in the first installment of $24,945.28 includes interest expense and Principal amount.
Principal amount in the cash paid = Cash payment - Interest expense
= $ 24,945.28 - $ 5,400
= $ 19545.28
Therefore, part of the principal amount has paid in the first installment and is to be reduced from the long term bank loan A/c.
Add Answer to:
(c) Prepare the journal entry to record the first instalment payment. (Round answers to 2 decimal...
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Exercise 10-7 (Part Level Submission) The following instalment payment schedule is for a long-term bank loan payable: C...
Exercise 10-7 (Part Level Submission) The following instalment payment schedule is for a long-term bank loan payable: Cash Payment Interest Expense Reduction of Principal Interest Period Issue date $19,545.28 $24,945.28 24,945.28 24,945.28 24,945.28 24,945.28 $5,400.00 4,422.74 3,396.61 2,319.18 1,187.87 20,522.54 21,548.67 22,626.10 23,757.41 Principal Balance $108,000.00 88,454.72 67,932.18 46,383.51 23,757.41 0.00 (a) Is the above schedule a fixed principal plus interest or blended principal and interest payment schedule?
*Exercise 10-7 (Part Level Submission) The following instalment payment schedule is for a long-term bank loan...
*Exercise 10-7 (Part Level Submission) The following instalment payment schedule is for a long-term bank loan payable: Cash Payment Interest Expense Reduction of Principal Interest Period Issue date $24,945.28 24,945.28 24,945.28 24,945.28 24,945.28 $5,400.00 4,422.74 3,396.61 2,319.18 1,187.87 519,545.28 20,522.54 21,548.67 22,626.10 23,757.41 Principal Balance $108,000.00 88,454.72 67,932.18 46,383.51 23,757.41 0.00 "(a) Your answer is correct. Is the above schedule a fixed principal plus interest or blended principal and interest payment schedule? Blended principal and interest payment schedule Attempts: 1...
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We were unable to transcribe this imagePrepare the journal entry at the end of the first...
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Problem 10-3A On September 30, 2017, Coldwater Corporation purchased equipment for $940,000. The equipment was purchased...
Problem 10-3A On September 30, 2017, Coldwater Corporation purchased equipment for $940,000. The equipment was purchased with a $100,000 down payment and a three-year, 5%, $840,000 bank loan for the balance. The terms provide for payment of the bank loan with quarterly fixed principal payments of $70,000, plus interest, starting on December 31. Coldwater has a November 30 year end and records adjusting entries annually. Record the purchase of equipment on September 30, 2017. (Round answers to the nearest whole...
On September 30, 2017, Coldwater Corporation purchased equipment for $1,030,000. The equipment was purchased with a...
On September 30, 2017, Coldwater Corporation purchased equipment for $1,030,000. The equipment was purchased with a $80,000 down payment and a three-year, 4%, $950,000 bank loan for the balance. The terms provide for payment of the bank loan with quarterly fixed principal payments of $79,167, plus interest, starting on December 31. Coldwater has a November 30 year end and records adjusting entries annually. Record the purchase of equipment on September 30, 2017. (Round answers to the nearest whole dollar, e.g....
The following instalment payment schedule is for a long-term bank loan payable: Reduction of Interest Cash Payment Principal Interest Period Principal Balance Expense $79,000.00 Issue date $4,740.00 $18,754.32 $14,014.32 64,985.68 1 2 18,754.32 3,899.14 14,855.18 50,130.50 15,746.49 3 18,754.32 3,007.83 34,384.01 4 18,754.32 2,063.04 16,691.28 17,692.73 5 18,754.32 1,061.59 17,692.73 0.00 Is the above schedule a fixed principal plus interest or blended principal and interest payment schedule? LINK TO TEXT Assuming payments are made annually, what is the interest rate...
Exercise 10-7 (Part Level Submission) The following instalment payment schedule is for a long-term bank loan payable: Cash Payment Interest Expense Reduction of Principal Interest Period Issue date $19,545.28 $24,945.28 24,945.28 24,945.28 24,945.28 24,945.28 $5,400.00 4,422.74 3,396.61 2,319.18 1,187.87 20,522.54 21,548.67 22,626.10 23,757.41 Principal Balance $108,000.00 88,454.72 67,932.18 46,383.51 23,757.41 0.00 (a) Is the above schedule a fixed principal plus interest or blended principal and interest payment schedule?
*Exercise 10-7 (Part Level Submission) The following instalment payment schedule is for a long-term bank loan payable: Cash Payment Interest Expense Reduction of Principal Interest Period Issue date $24,945.28 24,945.28 24,945.28 24,945.28 24,945.28 $5,400.00 4,422.74 3,396.61 2,319.18 1,187.87 519,545.28 20,522.54 21,548.67 22,626.10 23,757.41 Principal Balance $108,000.00 88,454.72 67,932.18 46,383.51 23,757.41 0.00 "(a) Your answer is correct. Is the above schedule a fixed principal plus interest or blended principal and interest payment schedule? Blended principal and interest payment schedule Attempts: 1...
Exercise 10-5 La Porte Company obtained a 10-year, 5%, $164,000 mortgage loan to finance the purchase of a warehouse at March 31, 2017. The terms provide for semi-annual instalment payments on September 30 and March 31 Record the obtaining of the mortgage payable on March 31, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Date Debit Credit Mar. 31 SHOW LIST OF ACCOUNTS LINK TO TЕXT Record the...
Exercise 10-5 La Porte Company obtained a 10-year, 5 % , $187 ,000 mortgage loan to finance the purchase of a warehouse at March 31, 2017. The terms provide for semi-annual instalment payments on September 30 and March 31. Record the obtaining of the mortgage payable on March 31, 2017. (Credit account titles are automatically indented when the amount entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Mar. 31 SHOW IIST OF ACCOUNTS LINK TO TEX...
We were unable to transcribe this imagePrepare the journal entry at the end of the first year to record the payment of principal and interest, assuming that the company uses the effective interest method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Round final answers to 0 decimal places, e.g. 5,275.) Account Titles and Explanation...
Problem 10-3A On September 30, 2017, Coldwater Corporation purchased equipment for $940,000. The equipment was purchased with a $100,000 down payment and a three-year, 5%, $840,000 bank loan for the balance. The terms provide for payment of the bank loan with quarterly fixed principal payments of $70,000, plus interest, starting on December 31. Coldwater has a November 30 year end and records adjusting entries annually. Record the purchase of equipment on September 30, 2017. (Round answers to the nearest whole...
Problem 10-3A On September 30, 2017, Coldwater Corporation purchased equipment for $940,000. The equipment was purchased with a $100,000 down payment and a three-year, 5%, $840,000 bank loan for the balance. The terms provide for payment of the bank loan with quarterly fixed principal payments of $70,000, plus interest, starting on December 31. Coldwater has a November 30 year end and records adjusting entries annually. Record the purchase of equipment on September 30, 2017. (Round answers to the nearest whole...
Problem 10-3A On September 30, 2017, Coldwater Corporation purchased equipment for $940,000. The equipment was purchased with a $100,000 down payment and a three-year, 5%, $840,000 bank loan for the balance. The terms provide for payment of the bank loan with quarterly fixed principal payments of $70,000, plus interest, starting on December 31. Coldwater has a November 30 year end and records adjusting entries annually. Record the purchase of equipment on September 30, 2017. (Round answers to the nearest whole...
On September 30, 2017, Coldwater Corporation purchased equipment for $1,030,000. The equipment was purchased with a $80,000 down payment and a three-year, 4%, $950,000 bank loan for the balance. The terms provide for payment of the bank loan with quarterly fixed principal payments of $79,167, plus interest, starting on December 31. Coldwater has a November 30 year end and records adjusting entries annually. Record the purchase of equipment on September 30, 2017. (Round answers to the nearest whole dollar, e.g....
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