Question: Installment Note: The following journal entry was made by your predecessor to record the annual payment on a 5%, 10-year installment note. JOURNAL ACCOUNTING EQUATION

Installment Note:

The following journal entry was made by your predecessor to record the annual payment on a 5%, 10-year installment note.

JOURNAL

ACCOUNTING EQUATION

DATE

DESCRIPTION

POST. REF.

DEBIT

CREDIT

ASSETS

LIABILITIES

EQUITY

1

Oct. 1

Interest Expense

710

178,300.00

2

Notes Payable

215

524,262.00

3

Cash

110

702,562.00

1.What was the carrying amount (book value) of the installment note before the payment on October 1?

2.What portion of next year's payment will be interest? (Round the amount to the nearest dollar?

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