Exercise 106 On July 1 2017 Granvile Ltd borrowed 19300 by s

Exercise 10-6 On July 1, 2017, Granvile Ltd. borrowed $19,300 by signing a two-year 4% note payable. The note is payable in two annual blended principa and interest instalments of $10,233 on June 30. Adjusting ournal entries are recorded annually at year end on December 31 Prepare an instalment payment schedule for the term of the note. (Round answers to the nearest whole dollar, e.g. 5,255.) Annual Interest Period Cash Payment Interest Expense Reduction of Principal Principal Balance July 1, 2017 une 30, 2018 June 30, 2019 LINK TO TEXI

Solution

Interest is arrived at by multiplying outstanding principal balance with 4% for the proportionate period.

Annual interest period	Cash payment	Interest exp	Reduction of principal	Principal balance
Jul 1, 2017				19,300
Jun 30, 2018	10,233	772	9,461	9,839
Jun 30, 2019	10,233	394	9,839	-