Homework Answers
1.
| No. | Date | General Journal | Debit | Credit |
| 1 | Jan 01 | Cash | $370,000 | |
| Note payable | $370,000 | |||
| ( To record issuance of note) |
2.
Interest expense = Note payable x Interest rate x Time period
= 370,000 x 4% x 1
= $14,800
Principal = Installment - Interest
= 83,112-14,800
= $68,312
| Interest expense | $14,800 |
| Principal reduction | $68,312 |
Kindly comment if you need further assistance. Thanks‼!
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