n January 1 of 20Y2, Hebron Company issued a $19,000, 4-year, 11% installment no

Question

n January 1 of 20Y2, Hebron Company issued a $19,000, 4-year, 11% installment note to Ventsam Bank. The note requires annual payments of $6,124, 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 $2,090 and principal of $4,034. If an amount box does not require an entry, leave it blank.

Paid the annual payment on the note, which included interest of $607. 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 $2,090 and principal of $4,034. 20Y5 Dec. 31 Paid the annual payment on the note, which included interest of $607. The remainder of the payment reduced the principal balance on the note.

Explanation / Answer

Journal entries:

Jan 1 ,20Y2 Cash $19,000 Notes Payable $19,000 (To record the issue of notes payable) Dec 31,20Y2 Notes Payable $4034 Interest expense $2090 Cash $6124 (To record the annual payment) Dec 31, 20Y5 Notes Payable(6124-607) $5,517 Interest expense $607 Cash $6124 (To record the annual payment

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