Homework Answers
Answer
- Requirement 1 is already complete and correct
- Requirement 2
Interest Expense will be the annual interest accrued on the notes payable.
Interest expense = $ 330,000 x 4% = $ 13,200
Installment amount = $ 74,127
Hence, Principal reduction will be = 74127 – 13200 = $ 60,927
- Answer
|
Interest Expense |
$ 13,200.00 |
|
Principal Reduction |
$ 60,927.00 |
--For understanding purpose – Journal entry
|
31-Dec-18 |
Interest Expense |
$ 13,200.00 |
|
|
Notes Payable |
$ 60,927.00 |
||
|
Cash |
$ 74,127.00 |
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