On January 1, 2016, Bryson Company obtained a $168,500, four-year, 11% installment note from Campbell Bank. The note requires annual payments of $54,312, beginning on December 31, 2016. Required: A. Prepare an amortization table for this installment note, similar to the one presented in Exhibit 4. B. Journalize the entries for the issuance of the note and the four annual note payments. Be sure to include the year in the date for the entries. Refer to the Chart of Accounts for exact wording of account titles. C. Describe how the annual note payment would be reported in the 2016 income statement.
We have been provided with the information as follow
On January 1, 2016, Bryson Company obtained a $168,500, four-year, 11% installment note from Campbell Bank
note requires annual payments of $54,312, beginning on December 31, 2016
amortization table for this installment note is as follow
(A)
(B)
( c )
(D)
(E)
Period
Ending Date
Beginig Balnce
Debit Interest
Expnses
Debit Note
P_ayable
Credit
Cash
endinig
Balnce
2016
168500
18535
35777
54312
132723
(168500*11%)
2017
132723
14599.53
39712.47
54312
93010.53
(132723*11%
2018
93010.53
10231.1583
44080.84
54312
48929.69
(93010.53*11%)
2019
48929.6883
5382.265713
48929.73
54312
0
(5382.27*11%)
Total
48747.95401
168500
217248
(B)
Journalize the entries for the issuance of the note and the four annual note payments
Date
Description
Debit $
Credit $
1/1/2016
Cash
168500
To Notes Payable
168500
31/12/2016
Interest Expense
18535
Notes Payable
35777
Cash
54312
31/12/2017
Interest Expense
14599.53
Notes Payable
39712.47
Cash
54312
31/12/2018
Interest Expense
10231.16
Notes Payable
5382.24
Cash
54312
31/12/2019
Interest Expense
5382.27
Notes Payable
48929.73
Cash
54312
(C)
Describe how the annual note payment would be reported in the 2016 income statement.
Installment Notes payment would be reposted as follow in the 0216 income statement
Income statement
Revenue
xxxx
Less:
Operating Expenses
Intesrest on notes Payable
-18535
-18535
Net income
