Question

On January 1, a company borrowed cash by Issuing a $360,000,4%, Installment note to be paid in three equal payments at the end of each year beginning December 31 (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1 (Use appropriate factors) from the tables provided.) What would be the amount of each installment? Prepare an amortization table for the installment note. Prepare the journal entry for the second Installment payment. Complete this question by entering your answers in the tabs below. Annual Dayment Amort Table General Journal What would be the amount of each installment? (Round final answers to the nearest whole dollar) Table or calculator function: Amort Table>

Answer 1

What would be the amount of Each Instalment PVA of $1 Table or calculator Function : Amount Borrowed 360,000.00 n= 4% 129,726 Annual Payments Note : Amount of each installment note = Loan amount /present value of ordinary annuity of $1 $360000 / 2.77509 129,726 Amortization Table No of Periods Cash Payment 1 $ 2 $ 3 $ 129,726 129,726 129,726 Interest Expense Decrease in Balance Outstanding Balance $ 360,000.00 $ 14,400 $ 115,326 $ 244,674 $ 9,787 $ 119,939 $ 124,736 $ 4,989 $ 124,736 $ (0) General Journal Event Credit Debit $ General Journal Interest Expense Notes Paybale To Cash 9,787 119,939 129,726 (To Record Instalment payment)