Question

On November 1, 2017, Norwood borrows $560,000 cash from a bank by signing a five-year installment note bearing 9% interest. The note requires equal payments of $143,970 each year on October 31. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) Required: 1. Complete an amortization table for this installment note. 2. Prepare the journal entries in which Norwood records the following: (a) Accrued interest as of December 31, 2017 (the end of its annual reporting period) (b) The first annual payment on the note. Complete this question by entering your answers in the tabs below. Req 2A and 2B Req 1 Prepare the journal entries in which Norwood records for accrued interest as of December 31, 2017 (the end of its annual reporting period) and the first annual payment on the note. View transaction list Journal entry worksheet 1 2 Record the interest accrued on the note as of December 31, 2017. Note: Enter debits before credits. Date Debit General Journal Credit Dec 31, 2017

Answer 1

2a
Dec 31,2017	Interest expense	8400		=560000*9%*2/12
	Interest payable		8400
2b
Oct 31,2018	Interest expense	42000		=560000*9%*10/12
	Interest payable	8400
	Notes payable	93570
	Cash		143970