Problem 10-12A (Part Level Submission) Laverne purchased a new piece of equipmen

Question

Problem 10-12A (Part Level Submission) Laverne purchased a new piece of equipment to be used in its new facility. The $390,000 piece of equipment was purchased with a $58,500 down payment and with cash received through the issuance of a $331,500, 9%, 5-year mortgage payable issued on January 1, 2017. The terms provide for annual installment payments of $85,226 on December 31 (a) Your answer is partially correct. Try again. Prepare an installment payments schedule for the first five payments of the notes payable. (Round answers to 0 decimal places, e.g. 125.) Annual Interest Period Cash Payment Interest Expense Reduction of Principal Principal Balance Issue Date 390000 58500 331500 331500 19890 65336 266164 266164 15970 69256 196908 196908 11814 73412 123496 123496 7410 77816 45680 45680 39546 85226 Amount may be off due to rounding

Explanation / Answer

Annual interest period Cash payment Interest expense Reduction of principal Principal balance Issue date 331500 1 85226 29835 55391 276109 2 85226 24850 60376 215733 3 85226 19416 65810 149923 4 85226 13493 71733 78190 5 85226 7036 78190 0

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