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

PAGE 22

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	↓

Using the information provided, compute the following amounts.

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.)

Answer rating: 100% (QA)

1 Carrying amount of bonds before the payme... View the full answer