Problem

Installment notes LO6 On November 1, 2010, Norwood borrows $200,000 cash from a bank...

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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Solutions For Problems in Chapter 16