Requirement 1: | ||||
Date | General Journal | Debit | Credit | |
1-Jan-18 | Equipment | $5,900,000 | ||
Notes Payable | $5,900,000 | |||
Requirement 2 : Amortization Schedule : | ||||
We will use PVA of $1 table for calculation. | ||||
PVA of $1 for n=4, i=11% | 3.10245 | |||
So, yearly installment is $ 5,900,000 / 3.10245 | 1,901,725 | |||
31-Dec | Cash Payment | Effective Interest | Decrease in Balance | Outstanding Balance |
$5,900,000 | ||||
2018 | 1,901,725 | $649,000 | $1,252,725 | $4,647,275 |
2019 | 1,901,725 | $511,200 | $1,390,525 | $3,256,749 |
2020 | 1,901,725 | $358,242 | $1,543,483 | $1,713,266 |
2021 | 1,901,725 | $188,459 | $1,713,266 | $0 |
Requirement 3 and 4: | ||||
Date | General Journal | Debit | Credit | |
31-Dec-18 | Notes Payable | $ 1,252,725 | ||
Interest Expense | $ 649,000 | |||
Bank | $ 1,901,725 | |||
31-Dec-20 | Notes Payable | $ 1,543,483 | ||
Interest Expense | $ 358,242 | |||
Bank | $ 1,901,725 |
Exercise 14-20 Installment note; amortization schedule (LO14-3) American Food Services, Inc., acquired a packaging machine from...
Exercise 14-20 Installment note; amortization schedule (L014-3) American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2018. In payment for the $5.9 million machine, American Food Services issued a four year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 11%. (EV of $1. PV of $1. FVA of $1, PVA...
Exercise 14-20 Installment note; amortization schedule (L014-3) American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2018. In payment for the $5.9 million machine, American Food Services issued a four year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 11%. (EV of $1. PV of $1. FVA of $1, PVA...
American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2018. In payment for the $5.9 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 11%, (FV of $1. PV of $1. FVA of $1. PVA of $1. EVAD of $1 and PVAD of...
American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2018. In payment for the $4.8 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 12%. (FV of $1. PV of $1, FVA of $1. PVA of $1, FVAD of $1 and PVAD of...
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American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. In payment for the $4.6 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 12%. (FV of $1, PV of $1. FVA of $1, PVA of $1, FVAD of $1 and PVAD of...
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American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. In payment for the $5.5 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 12%. (FV of $1, PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of...
American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. In payment for the $4.2 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 12%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of...
Check my work American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. In payment for the $5.3 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 10%. (FV of $1. PV of $1, EVA of $1. PVA of $1. FVAD of $1...