On October 31, 2011, a company borrows $50,000 from its bank for five months at an annual interest rate of 8%. The loan agreement specifies that it is to be repaid in five equal monthly installments, and the bank calculates the required payments to be $10,200.89 per month. The company's fiscal year end is December 31.
Required:
a. Prepare an amortization table for this loan, similar to the one shown on page 597.
b. Give the journal entries that would be made in 2011 to record the issuance of the note on October 31 and the first two payments on November 30 and December 31.
c. What is the amount of the liability related to this loan that would be reported on the company's December 31, 2011, statement of financial position?