On January 1, 2024, Strato Corporation borrowed $2 million from a local bank to construct a new
Question:
On January 1, 2024, Strato Corporation borrowed $2 million from a local bank to construct a new building over the next three years. The loan will be paid back in three equal installments of $776,067 on December 31 of each year. The payments include interest at a rate of 8%.
Required:
1. Record the cash received when the note is issued.
2. Prepare an amortization schedule over the three-year life of the installment note. Round answers to the nearest dollar.
3. Use amounts from the amortization schedule to record each installment payment.
Step by Step Answer:
1 Cash of 2000000 is received when the note is issued as the loan is borrowed from a local bank 2 Y...View the full answer
Related Video
An amortization schedule (sometimes called an amortization table) is a table detailing each periodic payment on an amortizing loan. Each calculation done by the calculator will also come with an annual and monthly amortization schedule above. Each repayment for an amortized loan will contain both an interest payment and payment towards the principal balance, which varies for each pay period. An amortization schedule helps indicate the specific amount that will be paid towards each, along with the interest and principal paid to date, and the remaining principal balance after each pay period
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