Question

On January 1, 2016, Belden, Inc. issued long-term notes payable for $50,000. The note will be paid over 10 years with payments of $5,000 plus 12% interest due each January 1, beginning January 1, 2017. Prepare the amortization schedule for the first three payments.

Answer 1

Belden, Inc.

Amortization Schedule

Period PV PMT Interest Deduction Net Liability

2017 $50,000.00 $11,000.00 $6,000.00 $5,000.00 $45,000.00

2018 $45,000.00 $10,400.00 $5,400.00 $5,000.00 $40,000.00

2019 $40,000.00 $9,800.00 $4,800.00 $5,000.00 $35,000.00

Step-by-step explanation:

a) Data and Calculations:

Long-terms payable = $50,000

Period of note = 10 years

First payment = $11,000 ($5,000 principal + $6,000 interest)

Interest rate = 12%

Long-term payable after January 1, 2017 = $45,000 ($50,000 - $5,000)

12% Interest on payable balance of $45,000 = $5,400

Second payment = $10,400 ($5,000 principal + $5,400 interest)

Long-term payable after January 1, 2018 = $40,000 ($45,000 - $5,000)

12% Interest on payable balance of $40,000 = $4,800

Third payment = $9,800 ($5,000 principal + $4,800 interest)

Long-term payable after January 1, 2019 = $35,000 ($40,000 - $5,000)