Exercise 9-5 (Algo) Compute total interest and record installment notes (LO9-2)

A company decides to obtain a small-business loan of $275,000. The financial institution from which the company borrows offers two options:

a. Borrow $275,000 at 6% with monthly payments of $5,316.52 over 5 years.

b. Borrow $275,000 at 7% with monthly payments of $3,192.98 over 10 years.

Required:

1. Record the issuance of an installment note payable under each option.
2. Record the payments for the first and second month under each option.
3. Determine the total amount of interest paid under each option over the full period of the note.

Exercise 9-5 (Algo) Compute total interest and record installment notes (LO9-2) A company decides to obtain a small-business loan of $275,000. The financial institution from which the company borrows offers two options: a. Borrow $275,000 at 6% with monthly payments of $5,316.52 over 5 years. b. Borrow $275,000 at 7% with monthly payments of $3,192.98 over 10 years. Required: 1. Record the issuance of an installment note payable under each option. 2. Record the payments for the first and second month under each option. 3. Determine the total amount of interest paid under each option over the full period of the note. Complete this question by entering your answers in the tabs below. Record the issuance of an installment note payable under each option. (If no entry is required for a particular transoction/event Journal Entry Required" in the first account field. Round your answers to 2 decimal places.) Journal entry worksheet Record the issuance of a note for $275,000 at 6% with monthly payments of $5,316.52 over 5 years. Note: Enter debits before credits. Journal entry worksheet Record the issuance of a note for $275,000 at 7% with monthly payments of $3,192.98 over 10 years. Note: Enter debits before credits. Journal entry worksheet 4 Record the first payment of a note for $275,000 at 6% with monthly payments of $5,316.52 over 5 years. Note: Enter debits before credits. Journal entry worksheet Record the second payment of a note for $275,000 at 6% with monthly payments of $5,316.52 over 5 years. Note: Enter debits before credits. Journal entry worksheet Record the first payment of a note for $275,000 at 7% with monthly payments of $3,192,98 over 10 years. Note: Enter debits before credits. Journal entry worksheet