Question

Problem 10-5A Installment notes LO C1 On November 1, 2019, Norwood borrows $580,000 cash from a bank by signing a five-year installment note bearing 5% interest. The note requires equal payments of $133,965 each year on October 31. Required: 1. Complete an amortization table for this installment note. 2. Prepare the journal entries in which Norwood records the following: (a) Accrued interest as of December 31, 2019 (the end of its annual reporting period). (b) The first annual payment on the note. Complete this question by entering your answers in the tabs below. Req 1 Req 2A and 2B Complete an amortization table for this installment note. (Round your intermediate calculations to the nearest dollar amount.) Period Ending Date Beginning Balance Debit Interest Expense + Debit Notes Payable = Credit Cash Ending Balance 10/31/2020 10/31/2021 10/31/2022 10/31/2023 10/31/2024 Total < Req 1 Req 2A and 2B

Answer 1

Answer :-

Period Ending Date	Beginning Balance	Debit Interest Expenses	Debit Notes Payable	Credit Cash	Ending Balance
10/31/2020	$580,000	$29,000	$104,965	$133,965	$475,035
10/31/2021	$475,035	$23,752	$110,213	$133,965	$364,822
10/31/2022	$364,822	$18,241	$115,724	$133,965	$249,098
10/31/2023	$249,098	$12,455	$121,510	$133,965	$127,588
10/31/2024	$127,588	$6,377	$94,590	$133,965	$0
		$89,825	$547,002	$669,825
Date	Accounts and Explanation	Debit	Credit
Dec 31, 2019	Interest Expenses	$4,833
	Interest Payable		$4,833
	(To record accrued interest)
Oct 31, 2020	Interest Expenses	$24,167
	Interest Payable	$4,833
	Notes Payable	$104,965
	Cash		$133,965
	(To record annual payment of note)
Working
Accrued interest on the installment note payable ($29,000 × 2/12) = $4,833