Installment notes LO6
On October 1, 2010, Gordon Enterprises borrows $150,000 cash from a bank by signing a three-year installment
note bearing 10% interest. The note requires equal total payments of $60,316 each year on
September 30. (Hint: Use the demonstration problem as a guide)
Required
1. Complete an amortization table for this installment note similar to the one in Exhibit 16.4.
2. Prepare the journal entries in which Gordon records (a) accrued interest as of December 31, 2010
(the end of its annual reporting period), and (b) the first annual payment on the note.
Check (1) 9/30/2012 ending balance,
$54,836
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