Question

On the first day of the fiscal year, a company issues $39,000, 10%, four-year installment notes...

On the first day of the fiscal year, a company issues $39,000, 10%, four-year installment notes that have annual payments of $12,303. The first note payment consists of $3,900 of interest and $8,403 of principal repayment. a. Journalize the entry to record the issuance of the installment notes. Cash b. Journalize the first annual note payment. For a compound transaction, if an amount box does not require an entry, leave it blank.

Homework Answers

Answer #1
Ans. Date Accounts and Titles Dr.($) Cr.($)
(a) Cash          39,000
    To 10% Notes Payable      39,000
(Being company issues 10% Notes for four years )
(b)     10% Notes Payable            8,403
    Interest            3,900
    To Cash      12,303
(Being first payment made by company which consist 3900 interest and 8403 principal)
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