Question: On January 1 2014 Mixon Co borrowed cash from First

On January 1, 2014, Mixon Co. borrowed cash from First City Bank by issuing a $90,000 face value, three-year term note that had a 7 percent annual interest rate. The note is to be repaid by making annual cash payments of $34,295 that include both interest and principal on December 31 of each year. Mixon used the proceeds from the loan to purchase land that generated rental revenues of $45,000 cash per year.

a. Prepare an amortization schedule for the three-year period.
b. Organize the information in accounts under an accounting equation.
c. Prepare an income statement, a balance sheet, and a statement of cash flows for each of the three years.
d. Does cash outflow from operating activities remain constant or change each year? Explain.

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  • CreatedMay 22, 2014
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