A partial amortization schedule for a 10-year note payable that Mabry Company issued on January 1, 2018, is shown as follows.

Required
a. What rate of interest is Mabry Company paying on the note?
b. Using a financial statements model like the one shown, record the appropriate amounts for the following two events:
(1) January 1, 2018, issue of the note payable.
(2) December 31, 2018, payment on the note payable.

c. If the company earned $62,000 cash revenue and paid $45,000 in cash expenses in addition to the interest in 2018, what is the amount of each of the following?
(1) Net income for 2018.
(2) Cash flow from operating activities for 2018.
(3) Cash flow from financing activities for 2018.
d. What is the amount of interest expense on this loan for 2021?

Transcribed Image Text:

Accounting Perlod Princlpal Cash Applled to Applled to Princlpal Balance January 1 Paymentnterest 2018 2019 2020 $200.000 184,826 168.742 27,174 $ 27,174 12,000 11,090 10.125 $15,174 16,084 17,049 27,174 Event No. Assets = Lab. + Equity Rev. - Exp. Net Inc. Cash Flow