The following instalment payment schedule is for a long-term bank loan payable:

Instructions
(a) Is the above schedule a fixed principal plus interest or blended principal and interest payment schedule?
(b) Assuming payments are made annually, what is the interest rate on the bank loan?
(c) Prepare the journal entry to record the first instalment payment.
(d) What are the current and non-current portions of the bank loan after the payment at the end of period 2?

Transcribed Image Text:

Interest Period Issue date Cash Payment Interest Expense Reduction of Principal Principal Balance $23,097.48 23,097.48 23,097.48 23,097.48 23,097.48 $5,000.oo 4,095.13 3,145.01 2,147.38 1,099.88 $18,097.48 19,002.35 19,952.47 20,950.10 21,997.6o $100,00o.00 81,902.52 62,900.17 42,947.70 21,997.60 0 2 4