Question

NEXT HT RESOURCES а соне Natalie and Curtis met with a bank manager to discuss their options. She is willing to lend Cookie & Coffee Creations Inc. $12,000 on November 1, 2020, for a period of 3 years at a 5% Interest rate. The terms provide for flored principal payments of $2,000, on May 1 and November 1 of each year plus 6 months of interest. Your answer is partially correct. Try again. sults by Study Prepare a payment schedule for the life of the note. (If answer is o, please enter 0. Do not leave any fields bank.) Interest Period Cash Payment Interest Expense Reduction of Principal Principal Balance Nov. 2020 Totals 12.000 MacBook Air

Answer 1

Solution 1:

Interest Period	Cash Payment	Interest Expense	Reduction of Principal	Principal Balance
Nov-20				$12,000.00
May-21	$2,300.00	$300.00	$2,000.00	$10,000.00
Nov-21	$2,250.00	$250.00	$2,000.00	$8,000.00
May-22	$2,200.00	$200.00	$2,000.00	$6,000.00
Nov-22	$2,150.00	$150.00	$2,000.00	$4,000.00
May-23	$2,100.00	$100.00	$2,000.00	$2,000.00
Nov-23	$2,050.00	$50.00	$2,000.00	$0.00

Solution 2 & 3:

Journal Entries
Date	Particulars	Debit	Credit
1-Nov-20	Equipment	$17,000.00
	Cash		$5,000.00
	Note Payable		$12,000.00
	(To record purchase of oven)
1-May-21	Interest expense	$300.00
	Note Payable	$2,000.00
	Cash		$2,300.00
	(To record payment of note installment)
1-Nov-21	Note Payable	$2,000.00
	Interest payable	$250.00
	Cash		$2,250.00
	(To record payment of note installment)