On January 1, 2019, Brooks Co. borrowed cash from Green Valley Bank by issuing a $300,000 face
Question:
On January 1, 2019, Brooks Co. borrowed cash from Green Valley Bank by issuing a $300,000 face value 3-yr installment note payable that carried a 9% interest rate. The note is to be repaid by making annual cash payments of $118,516.43, which includes both principal and interest. The payments are to be made on December 31 of each year.
Required:
(a) Prepare an amortization schedule for the term of the loan showing the amounts to be paid on principal and interest for 2019, 2020, and 2021 and the loan balance at the end of the year. Round your figures to the nearest penny (two decimal places). (worth 15 points)
| Year | Bal. at Beg. of Period | Payment | Am't Applied to Interest | Am't Applied to Principal | Bal. at End of Period |
(b) What amount of interest will be shown on the 2020 income statement? (worth 1 point)
(c) What amount of liability for the note will be shown on the balance sheet as of December 31, 2020? (worth 1 point)
(d) Prepare the journal entry below to record the payment made on December 31, 2020. (worth 6 points)
| Date | Account | Dr. | Cr. |
Expert Answer:
a year Bal at Beg of period Payment Amt applies interest Amt applies to princip... View the full answer
