Question

Check my work On November 1, 2019, Norwood borrows $510,000 cash from a bank by signing a five-year installment note bearing 9% Interest. The note requires equal payments of $131,116 each year on October 31. 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, 2019 (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. Reg 1 Req 2A and 28 Complete an amortization table for this installment note. (Round your intermediate calculations to the nearest dollar amount.) -Credit Cash Beginning Balance $ 510,000 424,784 Debit Interest Expense $ 45,900 Debit Notes Payable $ 85,216 Ending Balance $ 424,784 $ 131,116 Period Ending Date 10/31/2020 10/31/2021 10/31/2022 10/31/2023 10/31/2024 Total Req 2A and 28 >

Answer 1

solution 1:

Period ending date	Beginning Balance	Debit interest expense	Debit notes payable	Credit Cash	Ending Balance
31-Oct-20	$510,000	$45,900	$85,216	$131,116	$424,784
31-Oct-21	$424,784	$38,231	$92,885	$131,116	$331,899
31-Oct-22	$331,899	$29,871	$101,245	$131,116	$230,653
31-Oct-23	$230,653	$20,759	$110,357	$131,116	$120,296
31-Oct-24	$120,296	$10,820	$120,296	$131,116	$0

Solution 2:

Journal Entries - Norwood
Date	Particulars	Debit	Credit
31-Dec-19	Interest expense Dr ($510,000*9%*2/12)	$7,650.00
	To Interest payable		$7,650.00
	(To record interest accrued on note)
31-Oct-20	Interest expense Dr	$38,250.00
	Interest payable Dr	$7,650.00
	Notes payable Dr	$85,216.00
	To Cash		$131,116.00
	(To record first installment payment)