Question

Exercise 10-11 Installment note entries LO C1 On January 1, 2017, Eagle borrows $24,000 cash by signing a four-year, 8% Installment note. The note requires four equal payments of $7,246, consisting of accrued interest and principal on December 31 of each year from 2017 through 2020. (Table 81. Table B. 2. Table B3, and Table 3.4) (Use appropriate factor(s) from the tables provided. Round your intermediate calculations and final answers to the nearest dollar amount. Round all table values to 4 decimal places, and use the rounded table values in calculations.) Prepare the journal entries for Eagle to record the loan on January 1, 2017, and the four payments from December 31, 2017, through December 31, 2020.

Answer 1

		Debit	Credit
Jan 01,2017	Cash	24000
	Notes payable		24000
Dec 31, 2017	Interest expense	1920		=24000*8%
	Notes payable	5326
	Cash		7246
Dec 31, 2018	Interest expense	1494		=(24000-5326)*8%
	Notes payable	5752
	Cash		7246
Dec 31, 2019	Interest expense	1034		=(24000-5326-5752)*8%
	Notes payable	6212
	Cash		7246
Dec 31, 2020	Interest expense	536		=(24000-5326-5752-6212)*8%
	Notes payable	6710
	Cash		7246