Question: On November 1, 2011, Leetch Ltd. borrows $400,000 cash from a bank by signing a five-year installment note bearing 8% interest. The note requires equal

On November 1, 2011, Leetch Ltd. borrows $400,000 cash from a bank by signing a five-year installment note bearing 8% interest. The note requires equal total payments each year on October 31.

Required
1. Compute the total amount of each installment payment.
2. Complete an amortization table for this installment note similar to the one in Exhibit 14.14.
3. Prepare the journal entries in which Leetch records (a) accrued interest as of December 31, 2011 (the end of its annual reporting period), and (b) the first annual payment on the note.

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