Solution 1:
Amortization table - Installment Note | |||||
Date | Beginning Balance | Debit interest expense | Debit notes payable | Credit Cash | Ending Balance |
31-Oct-19 | $470,000 | $28,200 | $83,375 | $111,575 | $386,625 |
31-Oct-20 | $386,625 | $23,198 | $88,378 | $111,575 | $298,248 |
31-Oct-21 | $298,248 | $17,895 | $93,680 | $111,575 | $204,567 |
31-Oct-22 | $204,567 | $12,274 | $99,301 | $111,575 | $105,266 |
31-Oct-22 | $105,266 | $6,309 | $105,266 | $111,575 | $0 |
Solution 2:
Journal Entries - Norwood | |||
Date | Particulars | Debit | Credit |
31-Dec-18 | Interest expense Dr ($470,000*6%*2/12) | $4,700.00 | |
To Interest Payable | $4,700.00 | ||
(Being interest accrued on note) | |||
31-Oct-19 | Notes Payable Dr | $83,375.00 | |
Interest payable Dr | $4,700.00 | ||
Interest expense Dr ($470,000*6%*10/12) | $23,500.00 | ||
To Cash | $111,575.00 | ||
(To record installment payment) |
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