Question

1. King Company was started on January 1, 2014 when it issued a $60,000 face value term note

to the State Bank. The note had a 10% annual interest rate and a 5-year term to maturity.

Principal and interest were paid in five annual payments of $15,828.

?

Prepare an amortization schedule allocating each payment between principal and interest.

Compute the balance in notes payable at the end of every year.

Answer 1

Note Payable Amortization Schedule

Year	Note Payable – Beginning Balance (a)	Annual Payments (b)	Principal Amount (c)	Interest Amount (d) = (a) x 10%	Note Payable – Ending Balance (e) = (a) – (c)
2014	60,000	15,828	9,828	6,000	50,172
2015	50,172	15,828	10,811	5,017	39,361
2016	39,361	15,828	11,892	3,936	27,469
2017	27,469	15,828	13,081	2,747	14,388
2018	14,388	15,828	14,388	1,439	-