Question

Entries for Installment Note Transactions on January 1, 20Y2, Hebron Company issued a $175,000, five-year, 8% installment note to Ventsam Bank. The note requires annual payments of $43,830, beginning on December 31, 2012. Journalize the entries to record the following: 20Y2 Jan. Issued the note for cash at its face amount. 1. Dec. Paid the annual payment on the note, which consisted of interest of $14,000 and 31. principal of $29,830. 2015 Dec. Paid the annual payment on the note, included $6,253 of interest. The remainder of the 31. payment reduced the principal balance on the note. Issued the note for cash at its face amount. If an amount box does not require an entry, leave it blank. 20Y2 Jan. 1 2012 Jan. 1

Answer 1

Journal

Date	Account Title and Explanation	Debit	Credit
Jan 1, 2002	Cash	175,000
	Note payable		175,000
Dec. 31, 2002	Note payable	29,830
	Interest expense	14,000
	Cash		43,830
Dec. 31, 2005	Note payable	37,577
	Interest expense	6,253
	Cash		43,830

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