On January 1, 2017, MM Co. borrows $430,000 cash from a bank and in return signs

Question

On January 1, 2017, MM Co. borrows $430,000 cash from a bank and in return signs an 4% installment note for five annual payments of $96,590 each with the first payment due one year after the note is signed. CTable B.3) (Use PV factors from table provided.) 1. Prepare the journal entry to record issuance of the note. View transaction list Journal entry worksheet Record the issuance of the note Note: Enter debits before credits. Date Debit Jan 01Cash 430,000 Notes payable 430,000 View general journal Record entry Clear entry ent at December 31, 2017, what amount goes toward interest expense? What amount goes 2. For the first $96,590 annual paym toward principal reduction of the note? S17,200 Interest expense Principal reduction

Explanation / Answer

1-Jan Cash 430000       Notes payable 430000 2 Interest expense 17200 =430000*4% Principal reduction 79390 =96590-17200

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