Question

Chapter 10 Question 2:

On November 1, 2017, Norwood borrows $410,000 cash from a bank by signing a five-year installment note bearing 9% interest. The note requires equal payments of $105,407 each year on October 31. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.)

Required:

1. Complete an amortization table for this installment note.
2. Prepare the journal entries in which Norwood records the following:
(a) Accrued interest as of December 31, 2017 (the end of its annual reporting period).
(b) The first annual payment on the note.

Complete an amortization table for this installment note. (Round your intermediate calculations to the nearest dollar amount.)

Period Ending Date	Beginning Balance	Debit Interest Expense	+ Debit Notes Payable	= Credit Cash	Ending Balance
10/31/2018
10/31/2019
10/31/2020
10/31/2021
10/31/2022
Total

Prepare the journal entries in which Norwood records for accrued interest as of December 31, 2017 (the end of its annual reporting period) and the first annual payment on the note.

Journal entry worksheet

Record the interest accrued on the note as of December 31, 2017.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Dec 31, 2017

Prepare the journal entries in which Norwood records for accrued interest as of December 31, 2017 (the end of its annual reporting period) and the first annual payment on the note.

Journal entry worksheet

Record the first installment payment on October 31, 2018. Assume no reversing entries were prepared.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Oct 31, 2018

Answer 1