Question

On January 1, 2021, Norwood borrows $470,000 cash from a bank by signing a five-year installment note bearing 6% interest. The note requires equal payments of $111,575 each year on December 31.

Answer 1

1. Complete an amortization table for this installment note. 2. Prepare the journal entries in which Norwood records the following: (a) Norwood borrows $470,000 cash by signing a five-year, 6% installment note. (6) Record the first installment payment on December 31, 2021. (c) Record the second installment payment on December 31, 2022. Reg 1 Reg 2 Prepare journal entries to record the note's issuance and each of the first two payments. View transaction list View journal entry worksheet No Date General Journal January 01, 2021 Cash Notes payable Credit Debit 470,000 470,000 2 December 31 2021 Interest expense 4,700 Interest payable 4,700 3 December 31 2022 4,700 Interest payable Interest expense Notes payable Cash 23,500 83,375 111.575