Exercise 10-4A Financial statement effects of an installment note LO 10-1 A partial amortization schedule for a 10-year note payable issued on January 1, Year 1, is shown next: Accounting Period Year 1 Year 2 Year 3 Principal Balance January 1 $230,000 211,714 192,514 Cash Payment $29,786 29,786 29,786 Applied to Interest $11,500 10,586 9,626 Applied to Principal $18,286 19, 2ee 20,160 Required a. Using a financial statements model like the one shown next, record the appropriate amounts for the following two events: (1) January 1, Year 1, Issue of the note payable. (2) December 31, Year 1, payment on the note payable. b. If the company earned $68,000 cash revenue and paid $48,000 in cash expenses in addition to the interest in Year 1, what is the amount of each of the following? (1) Net income for Year 1. (2) Cash flow from operating activities for Year 1. (3) Cash flow from financing activities for Year 1. c. What is the amount of interest expense on this loan for Year 4? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B1 Required B2 Required B3 Required C Using a financial statements model like the one shown next, record the appropriate amounts for the following two events: (1) January 1, Year 1, issue of the note payable. (2) December 31, Year 1, payment on the note payable. (In the Statement of Cash Flows column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity and NA to indicate the element is not affected by the event. Enter any decreases to account balances with a minus sign.) Show less Effect of Transactions on Financial Statements Income Statement Balance Sheet Assets Liabilities + Equity Revenue Expenses Event No. 1. 230,000 = (29,786) 200,214 X 2. Net Statement of Income Cash Flows 230,000FA (11,500)|(18,286) FA (11,500) X (11,500) OA 230,000+ (18,286) 211,714 X (11,500) (11,500) 11,500 11,500 X Required A Required B1 > Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B1 Required B2 Required B3 Required C If the company earned $68,000 cash revenue and paid $48,000 in cash expenses in addition to the interest in Year 1, what is the amount of Net income for Year 1? Revenue $ 68,000 Expenses Operating expenses (48,000) (11,500) Interest expense Total expenses (59,500) 8,500 Net income $ Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B1 Required B2 Required B3 Required C If the company earned $68,000 cash revenue and paid $48,000 in cash expenses in addition to the interest in Year 1, what the amount of Cash flow from operating activities for Year 1? (Amounts to be deducted should be indicated with minus sign.) Cash flows from operating activities: Inflow from customers $ Outflow for expenses Outflow of interest 68,000 (48,000) (11,500) X 8,500 w $ Net cash flow from operating activities $ X Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B1 Required B2 Required B3 Required c If the company earned $68,000 cash revenue and paid $48,000 in cash expenses in addition to the interest in Year 1, what is the amount of Cash flow from financing activities for Year 1? (Amounts to be deducted should be indicated with minus sign.) Cash flows from financing activities: Inflow from issue of note Outflow to repay note $ 230,000 (18,286) Net cash flow from financing activities $ 211,714 X Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B1 Required B2 Required B3 Required C What is the amount of interest expense on this loan for Year 4? (Round your answer to the nearest dollar amount.) Interest expense $ 8,618