Entries for Installment Note Transactions On January 1 of 20Y2, Hebron Company i
ID: 2580553 • Letter: E
Question
Entries for Installment Note Transactions
On January 1 of 20Y2, Hebron Company issued a $39,000, 4-year, 10% installment note to Ventsam Bank. The note requires annual payments of $12,303, beginning on December 31 of 20Y2.
Journalize the entries to record the following.
Issued the note for cash at its face amount.
Paid the annual payment on the note, which consisted of interest of $3,900 and principal of $8,403. If an amount box does not require an entry, leave it blank.
Paid the annual payment on the note, which included interest of $1,119. The remainder of the payment reduced the principal balance on the note. If an amount box does not require an entry, leave it blank.
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 $3,900 and principal of $8,403. 20Y5 Dec. 31 Paid the annual payment on the note, which included interest of $1,119. The remainder of the payment reduced the principal balance on the note.Explanation / Answer
Journal entries :
Date accounts & explanation debit credit 20Y2 jan 1 Cash a/c 39000 Notes payable a/c 39000 (To record issuance of notes) 20Y2 dec 31 Notes payable a/c 8403 Interest expenses a/c 3900 Cash a/c 12303 (To record installment paid) 20Y5 dec 31 Notes payable a/c 11184 Interest expenses a/c 1119 Cash a/c 12303 (To record installment paid)Related Questions
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