On November 30, 2020, Calla Resources Ltd. borrowed $170,000 from a bank by signing a four-year installment note bearing interest at 6%. The terms of the note require equal payments each year on November 30, starting November 30, 2021.Required

1. Calculate the size of each installment payment.

2. Complete an installment note amortization schedule for this note similar to Exhibit 14.19.

3. Present the journal entries that Calla would make to record accrued interest as of December 31, 2020 (the end of the annual reporting period), and the first payment on the note.

4. Now assume that the note does not require equal payments but does require four payments that include accrued interest and an equal amount of principal in each payment. Complete an installment note amortization schedule for this note similar to Exhibit 14.18. Present the journal entries that Calla would make to record accrued interest as of December 31, 2020 (the end of the annual reporting period), and the first payment on the note.

Answer rating: 100% (QA)

Lets tackle each of the requirements one by one 1 Calculate the size of each installment payment Since we are dealing with an installment loan with equal payments we can use the formula for an amortiz... View the full answer