FinanceCo lent $8.4 million to Corbin Construction on January 1, 2018, to constr

Question

FinanceCo lent $8.4 million to Corbin Construction on January 1, 2018, to construct a playground. Corbin signed a three-year, 4% installment note to be paid in three equal payments at the end of each year. (FV of $1. PV of $1. FVA of S1. PVA of $1. FVAD of S1 and PVAD of S1 (Use appropriote factor(s) from the tables provided.) Required: 1. Prepare the journal entry for FinanceCo's lending the funds on January 1, 2018. 2. Prepare an amortization schedule for the three-year term of the installment note 3. Prepare the journal entry for the first installment payment on December 31, 2018 4. Prepare the journal entry for the third instalilment payment on December 31. 2020 ok Complete this question by entering your answers in the tabs below int Req 2 Req 1 3 and 4 Prepare an amortization schedule for the three-year term of the installment note. (Enter your answers in whiole dollars) Dec. 31 Cash Payment Effective Interest Decrease inOutstanding rint erences 2018 2019 2020 Req 1 3 and 4

Explanation / Answer

Amort Schedule: Date Cash Effective Decrease in Outstanding payment Interest balance Balance 01.01.18 8400000 31.12.18 3026929 336000 2690929 5709071 31.12.19 3026929 228363 2798566 2910505 31.12.20 3026929 116424 2910505 0 Note: Loann amount 8400000 Annuity PVF for 3 years at 4% 2.77509 Annual Instalment to be paid 3026929 Req 1-3-4 Date Accounts title and explanations Debit $ Credit $ 01.01.18 Instalment note receivable Dr. 8400000      Cash account 8400000 31.12.18 Cash account Dr. 3026929     Interest revenue account 336000      Instalment note receivable 2690929 31.12.20 Cash account Dr. 3026929     Interest revenue account 116424      Instalment note receivable 2910505

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