Question

Data for the next 3 questions: Sara Company purchased a delivery truck at $40,000 plus 8%...

Data for the next 3 questions: Sara Company purchased a delivery truck at $40,000 plus 8% sales taxes. Sara paid $5,000 in cash and financed the rest at 6% requiring 36 equal monthly payment at the end of each month.

Q4. Provide the journal that must be made on purchase date

Account

Debit

Credit

Q5. Complete partial Loan Amortization Schedule in the space provided below.

Title:

Payment #

0

1

2

Q6. Provide the necessary journal entry that company must make for 2nd monthly payment

Account

Debit

Credit
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Homework Answers

Answer #1
Amount financed 38200 (40000*1.08-5000)
Pvifa (0.5%, 36) 32.871
Monthly Equated Pay 1162.12
Date Account title and Explanation Debit Credit
Delivery truck 43200
Cash 5000
Note Payable 38200
(To record purchase)
Payment # Monthly payment Interest Principal Carrying value
0 38200
1 1162.12 191 971.12 37228.88
2 1162.12 186.14 975.97 36252.91
Date Account title and Explanation Debit Credit
Interest expense 186.14
Note Payable 975.97
Cash 1162.12
(to record payment)
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