Exercise 1011 Installment note entries LO C1 On January 1 20

Exercise 10-11 Installment note entries LO C1 On January 1, 2017, Eagle borrows $100,000 cash by signing a four-year, 7% installment note. The note requires four equal payments of $29,523, consisting of accrued interest and principal on December 31 of each year from 2017 through 2020. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided. Round your answers to the nearest dollar amount.) Prepare the journal entries for Eagle to record the loan on January 1, 2017, and the four payments from December 31, 2017, through December 31, 2020 Answer is not complete No Date General Journal Debit Credit Jan 01, 2017 Cash 100,000 Notes payable 100,000 2 Dec 31, 2017 Interest expense Notes payable Dec 31, 2018 Interest expense Notes payable Cash 4 Dec 31, 2019 Interest expense Notes payable Cash Dec 31, 2020 Interest expense Notes payable Cash

Solution

No. Date General Journal Debit Credit 1 Jan 01, 2017 Cash $ 1,00,000 Notes Payable $ 1,00,000 2 Dec 31, 2017 Interest Expense                    7,000 Notes Payable 22,523 Cash 29,523 3 Dec 31, 2018 Interest Expense                    5,423 Notes Payable 24,100 Cash 29,523 4 Dec 31, 2019 Interest Expense                    3,736 Notes Payable 25,787 Cash 29,523 4 Dec 31, 2020 Interest Expense                    1,932 Notes Payable 27,591 Cash 29,523 Working: Year End Beginning Loan amount Interest Expense Installment Principal Ending Loan Balance Jan 01, 2017 $      1,00,000 Dec 31, 2017             1,00,000 7,000 29,523 22,523 77,477 Dec 31, 2018                77,477 5,423 29,523 24,100 53,377 Dec 31, 2019                53,377 3,736 29,523 25,787 27,591 Dec 31, 2020                27,591 1,932 29,523 27,591 0