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Exercise 10-12 Installment note amortization table LO C1 On January 1, 2019, Eagle Company borrows $35,000...

Exercise 10-12 Installment note amortization table LO C1 On January 1, 2019, Eagle Company borrows $35,000 cash by signing a

Exercise 10-12 Installment note amortization table LO C1 On January 1, 2019, Eagle Company borrows $35,000 cash by signing a four-year, 7% installment note. The note requires four equal payments of $10,333, consisting of accrued interest and principal on December 31 of each year from 2019 through 2022. Prepare an amortization table for this installment note. (Round all amounts to the nearest whole dollar.) Payments (B) (C) Debit Interest Debit Notes Expense Payable (A) Beginning Balance Period Ending Date 2019 (D) Credit Cash Ending Balance 2020 2021 2022 Total
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Answer #1
Payables
A B C D E
Period Ending Date Beginning Balance Debit Interest Expense Debit Notes Payables Credit Cash Ending Balance
2019 35,000 2,450 7,883 10,333 27,117
2020 27,117 1,898 8,435 10,333 18,682
2021 18,682 1,308 9,025 10,333 9,657
2022 9,657 676 9,657 10,333 -
Total 6,332 35,000 41,332

Notes:

For Year 2019

Interest Expense = Beginning Balance * 7%

Interest Expense = 35,000 * 7% = $ 2,450

Notes Payables = Installment Amount - Interest Expense

Notes Payables = 10,333 - 2,450 = $ 7,883

Cash = $ 10,333

Ending Balance = Beginning Balance - Notes Payables Debit

Ending Balance = 35,000 - 7,883 = $ 27,117

For Year 2020

Interest Expense = Beginning Balance * 7%

Interest Expense = 27,117 * 7% = $ 1,898

Notes Payables Debit = Installment Amount - Interest Expense

Notes Payables = 10,333 - 1,898 = $ 8,435

Cash = $ 10,333

Ending Balance = Beginning Balance - Notes Payables Debit

Ending Balance = 27,117 - 8,435 = $ 18,682

For 2021

Interest Expense = Beginning Balance * 7%

Interest Expense = 18,682 * 7% = $ 1,308

Notes Payables Debit = Installment Amount - Interest Expense

Notes Payables Debit= 10,333 - 1,308 = $ 9,025

Cash = $ 10,333

Ending Balance = Beginning Balance - Notes Payables Debit

Ending Balance = 18,682 - 9,025 = $ 9,657

For Year 2022

Interest Expense = Installment Amount - Beginning Balance

Interest Expense = 10,333 - 9,657 = $ 676

Notes Payables = 10,333 - 676 = $ 9,657

Cash = $ 10,333

Ending Balance = Nil

Additional Note

Ending Balance for one year is Beginning Balance for Another Year.

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