Use the information in Exercise 14-12 to prepare the journal entries for Eagle to record the note’s issuance and each of the four payments.

Data From Exercise 14-12

On January 1, 2021, Eagle Company borrows $100,000 cash by signing a four-year, 7% installment note. The note requires four equal payments of $29,523, consisting of accrued interest and principal on December 31 of each year from 2021 through 2024. Prepare an amortization table for this installment note like the one in Exhibit 14.12.

Data From Exhibit 14.12

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EXHIBIT 14.12 Payments Installment Note Amortization Schedule (A) (B) (C) (C) (D) (E) Debit Debit Credit Interest Notes Ending Beginning Expense 8% x (A) Payable (D) – (B) + Cash Balance Period Ending Date Balance (computed) (A) – (C) Excel: Installment note payments. (1) 12/31/2021 $60,000 $4,800 $ 18,482 $23,282 $41,518 A B 1 Rate per period (2) 12/31/2022 41,518 3,321 19,961 23,282 21,557 8% 2 Number of periods (3) 12/31/2023 21,557 1,725 21,557 23,282 3 Loan amount $60,000 $9,846 $60,000 $69,846 4 Loan payments =-PMT(B1,B2,B3)=$23,282- Decreasing Accrued Interest Increasing Principal Component Equal Cash Payments Excel: Principal portion of payments. A B 1 Rate per period 2021 $4,800 $18,482 8% Interest Number of periods * 2022 $3,321 $19,961 3 Loan amount $60,000 Principal 4 Period Principal 2023 $1,725 $21,557 $5,000 $15,000 $25,000 6. 2 *Table B.3 in Appendix B is used to compute the dollar amount of three payments that equal the initial note balance of $60,000 at 8% =-PPMT(B1,A5,B2,B3)=$18,482- interest. We go to Table B.3, row 3, and across to the 8% column, where the present value factor is 2.5771. The dollar amount is then =-PPMT(B1,A6,B2,B3)-$19,961- computed by solving the following equation. The amount is computed by dividing $60,000 by 2.5771, yielding $23,282. Table Present Value Factor Dollar Amount Present Value =-PPMT(B1,A7,82.B3)=$21,557 B.3 2.5771 ? $60,000 End of Year