On december 31, 2017, Houston Inc. Provided consulting services to Conroe compan

Question

On december 31, 2017, Houston Inc. Provided consulting services to Conroe companyat anagreed price of $356,630.79. Houston accepted $75000 down and agreed to accept the balance in six equal installments of $60,000 to be received annually on December 31st, beginning December, 2018. An assumed interest rate of 7.5% is imputed. using excel, prepare the amortization schedule and then record all required journal entries-that would be made by Houston and Conroe on the following dates a) December 31, 2017; b) December 31,2018; c) December 31 2019; D) December 31, 2020; E) December 31 2021; F) December 31, 2022; G) December 31 2023.

Please help on journal entries for Houston and Conroe since I have done the amortization table already. Thanks for your help

Explanation / Answer

Solution :

Amortization schedule Date Cash received Interest Income Principal amount received Balance in note receivables 31-Dec-17 $281,630.79 31-Dec-18 $60,000.00 $21,122.31 $38,877.69 $242,753.10 31-Dec-19 $60,000.00 $18,206.48 $41,793.52 $200,959.58 31-Dec-20 $60,000.00 $15,071.97 $44,928.03 $156,031.55 31-Dec-21 $60,000.00 $11,702.37 $48,297.63 $107,733.92 31-Dec-22 $60,000.00 $8,080.04 $51,919.96 $55,813.96 31-Dec-23 $60,000.00 $4,186.04 $55,813.96 $0.00

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