Installment notes LO6
On November 1, 2010, Norwood borrows $200,000 cash from a bank by signing a five-year installment
note bearing 8% interest. The note requires equal annual payments of $50,091 each year on October 31.
(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 Norwood (a) records 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) 10/31/2014 ending
balance, $46,382
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