Problem

On October 1, 2009, Miami Enterprises borrows $200,000 cash from a bank by signing a thr...

On October 1, 2009, Miami Enterprises borrows $200,000 cash from a bank by signing a three-year installment

note bearing 7% interest. The note requires equal total payments each year on September 30.

Required

1. Compute the total amount of each installment payment.

2. Complete an amortization table for this installment note similar to the one in Exhibit 14.14.

3. Prepare the journal entries to record (a) accrued interest as of December 31, 2009 (the end of its annual reporting period) and (b) the first annual payment on the note.

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