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 | xxx |
