On January 1 of 20Y2, Hebron Company issued a $32,000, 4-year, 11% installment n

Question

On January 1 of 20Y2, Hebron Company issued a $32,000, 4-year, 11% installment note to Ventsam Bank. The note requires annual payments of $10,314, beginning on December 31 of 20Y2.

Journalize the entries to record the following.

20Y2 Jan. 1 Issued the note for cash at its face amount. Dec. 31 Paid the annual payment on the note, which consisted of interest of $3,520 and principal of $6,794. 20Y5 Dec. 31 Paid the annual payment on the note, which included interest of $1,022. The remainder of the payment reduced the principal balance on the note.

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up   Statementshowing Computations Paticulars Dr CR a) Jan 01'20Y2 Cash Dr         32,000.00 To note Payable           32,000.00 b) Dec 31 '20Y2 Interest expense DR           3,520.00 Note Payable DR           6,794.00 To Cash           10,314.00 c) Dec 31 '20Y5 Interest expense DR           1,022.00 Note Payable DR           9,292.00 To Cash           10,314.00

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