On January 1, 2015, Corvallis Carnivals borrows $29,000 to purchase a delivery t

Question

On January 1, 2015, Corvallis Carnivals borrows $29,000 to purchase a delivery truck by agreeing to a 6%, four-year loan with the bank. Payments of $681.07 are due at the end of each month, with the first installment due on January 31, 2015. Record the issuance of the note payable and the first monthly payment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations. Round your final answers to 2 decimal places.)

January 1 2015: record the issuance of the notes payable

January 31 2015: record the first monthly payment

Explanation / Answer

Amt of Note Payable        29,000.0 Interest Rate = 6.0% pa Interest per month = 0.50% First Installment            681.07 Interest payable in First month =29000*0.5%=              145.0 Journal Entry Date Account title Dr $ Cr $ Jan 1.2015. Cash          29,000.0 Note Payable          29,000.00 ( Borrowing by accepting Note Payable) Jan 31.2015. Cash                681.07 Interest Expense              145.0 Note Payable            536.07 ( First Installemnt payment with record of interest and   principal repayment)

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.