Question

Entries for Installment Note Transactions On January 1 of Year 1, Bryson Company obtained a $63,000, four-year, 12% installment note from Campbell Bank. The note requires annual payments of $20,742, beginning on December 31 of Year 1. a. Prepare an amortization table for this installment note, similar to the one presented in Exhibit 4. Round the computation of the interest expense to the nearest whole dollar. Enter all amounts as positive numbers. Amortization of Installment Notes Interest Expense January 1 Note Payment (12% of January 1 Decrease in December 31 For the Year Ending Carrying Amount (Cash Paid) Note Carrying Amount) Notes Payable Carrying Amount Year 1 Year 2 Year 3 Year 4

Answer 1

a
For the year ending	January 1 Carrying amount	Note payment(Cash paid)	Interest expense	Decrease in Notes payable	December 31 Carrying amount
Year 1	63000	20742	7560	13182	49818
Year 2	49818	20742	5978	14764	35054
Year 3	35054	20742	4206	16536	18518
Year 4	18518	20742	2224	18518	0
		82968	19968	63000
b
Year 1 Jan. 1	Cash	63000
	Notes payable		63000
Year 1 Dec. 31	Interest expense	7560		=63000*12%
	Notes payable	13182
	Cash		20742
Year 2 Dec. 31	Interest expense	5978		=49818*12%
	Notes payable	14764
	Cash		20742
Year 1 Dec. 31	Interest expense	4206		=35054*12%
	Notes payable	16536
	Cash		20742
Year 1 Dec. 31	Interest expense	2224		=18518*12%
	Notes payable	18518
	Cash		20742