Question

Entries for installment Note Transactions On January 1, Year 1, Bryson Company obtained a $147,750, four-year, 7% installment note from Campbell Bank. The note requires annual payments of $13,620, beginning on December 31, Year 1. a. Prepare an amortization table for this installment note, similar to the one presented in Exhibit 4. Round the computation of the interest expense to the nearest whole dollar. Enter all amounts as positive numbers. (Note: Due to rounding, the 12/31/Year 4 Interest expense is provided.)

Answer 1

Solution:1
REPAYEMETNT SCHEDULE
	December.31	January.01         (Carrying Amount)	Note Payament             (Cash Paid )	Interest Expenses (7% of Jan.01 Note Carrying Amount)	Decrease in note Payable	December. 31      Carrying Amount
	Year 1	$                     1,47,750	$                         43,620	$                              10,343	$               33,277	$            1,14,473
	Year 2	$                     1,14,473	$                         43,620	$                                8,013	$               35,607	$                78,866
	Year 3	$                         78,866	$                         43,620	$                                5,521	$               38,099	$                40,767
	Year 4	$                         40,767	$                         43,620	$                                2,853	$               40,767	$                         -
Solution: 2
Journal Entries
Date	Account Title and explanation	Debit	Credit
Year 1 Jan.01	Cash	$                     1,47,750
	Note Payable		$                      1,47,750
Year 1 Dec. 31	Interest Expenses	$                         10,343
	Note Payable	$                         33,277
	Cash		$                         43,620
Year 2 Dec. 31	Interest Expenses	$                           8,013
	Note Payable	$                         35,607
	Cash		$                         43,620
Year 3 Dec. 31	Interest Expenses	$                           5,521
	Note Payable	$                         38,099
	Cash		$                         43,620
Year 4 Dec. 31	Interest Expenses	$                           2,853
	Note Payable	$                         40,767
	Cash		$                         43,620