Question

maining: On 1/1/X1, Williams Corp. borrowed $460,000 by agreeing to a 10%, 10-year installment note with the bank. The note's proceeds will eventually be used to purchase a building 3:29 The journal entry to record the note is already shown in the journal below. The note will be paid back in nine equal annual installment payments of $ 74,800 on December 31 of each year beginning December 31, 20X1. Required: Using the above information, prepare the journal entries to record the first and second installment payments due on 12/31/X1 and 12/31/X2, respectively Note: Round all calculations to the nearest whole dollar. Do not use currency symbols, commas or decimal points in your responses Credit Date 1/1/X1 Account Name Cash Note Payable Debit 460,000 460,000 12/31/X1 2/31/X2 Next page

Answer 1

Answer -

Journal of Williams Corp.

Date	Account Name	Debit	Credit
1/1/X1	Cash Note Payable (To record the borrowing)	460000 -	- 460000
12/31/X1	Interest Expense [$460000 * 10%] Note Payable [Balancing figure] Cash (To record the first installment payment)	46000 28800 -	- - 74800
12/31/X2	Interest Expense [($460000 - $28800) * 10%] Note Payable [Balancing figure] Cash (To record the second installment payment)	43120 31680 -	- - 74800
Total		609600	609600