Question

On September 30, 2017, Coldwater Corporation purchased equipment for $1,020,000. The equipment was purchased with a $100,000 down payment and a three-year, 4%, $920,000 bank loan for the balance. The terms provide for payment of the bank loan with quarterly fixed principal payments of $76,667, plus interest, starting on December 31. Coldwater has a November 30 year end and records adjusting entries annually.

(I only need help with the boxes in red!) Thank u so much

Record the first two instalment payments, on December 31, 2017, and March 31, 2018. (Round answers to the nearest whole doll account titles are automatically indented when the amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation Dec. 31, 2017 Bank Loan Payable 76667 Interest Expense 1022 Interest Payable 1022 Cash 77689 Mar. 31, 2018 Bank Loan Payable 76667 Interest Expense 1022 Cash 77689

Answer 1

a.

Date	Account titles	Debit	Credit
Dec-31	Bank loan Payable	$          76,667
	Interest Payable	$            6,133		=ROUND(920000*4%*2/12,0)
	Interest Expense	$            3,067		=ROUND(920000*4%*1/12,0)
	Cash		$          85,867
Mar-31	Bank loan Payable	$          76,667
	Interest Expense	$            8,433		=ROUND((920000-76667)*4%*3/12,0)
	Cash		$          85,100

b.

Date	Account titles	Debit	Credit
Nov-30	Interest Expense	$            6,133		=ROUND(920000*4%*2/12,0)
	Interest Payable		$            6,133
Dec-31	Bank loan Payable	$          72,541
	Interest Payable	$            6,133		=ROUND(920000*4%*2/12,0)
	Interest Expense	$            3,067		=ROUND(920000*4%*1/12,0)
	Cash		$          81,741
Mar-31	Bank loan Payable	$          73,266
	Interest Expense	$            8,475		=ROUND((920000-72541)*4%*3/12,0)
	Cash		$          81,741