Hetty Grey has just approached a venture capitalist for fi nancing for her new business venture, the development of a local ski hill. On July 1, 2016, Hetty was loaned

$150,000 at an annual interest rate of 7%. The loan is repayable over 5 years in annual installments of $36,584, principal and interest, due each June 30. The fi rst payment is due June 30, 2017. Hetty uses the effective-interest method for amortizing debt. Her ski hill company’s year-end will be June 30.

Instructions

(a) Prepare an amortization schedule for the 5 years, 2016–2021. (Round all calculations to the nearest dollar.)

(b) Prepare all journal entries for Hetty Grey for the fi rst 2 fi scal years ended June 30, 2017, and June 30, 2018. (Round all calculations to the nearest dollar.)

(c) Show the balance sheet presentation of the note payable as of June 30, 2018. (Hint: Be sure to distinguish between the current and long-term portions of the note.)