Exercise 1011 Installment note entries LO C1 on laruagy 1207

Exercise 10-11 Installment note entries LO C1 on laruagy 1.207 Eagde borows $26.0o cash by signing n ourver ex netalment note Tho nh @ 020 ro ual a $7,850, consisting of accrued interest and principal on December 31 of each year from 2 017 through 2020. (Table B1, Table B.2. Table 8.3, and Table B.4) (Use appropriate factorts) from the tables provided. Round your intermedlate calculations and final answers to the nearest dollar amount. Round all table values to 4 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. View transaction list Journal entry worksheet Eagle borrows $26,000 cash by signing a four-year, 8% installment note. Record the issuance of the note on January 1, 2017. Note: Enter debits before credits. Date General Journal Debit Credit Jan 01, 2017 Record entry Clear entry View general journal

Solution

Journal entries: Date Account Titles Debit $ Credit $ Jan 1 2017 Cash 26000 Installment Note 26000 (being borrowing on signing note) Dec 31 2017 Installment Note 5690 Interest expense 2160 Cash 7850 (being payment of installment) Dec 31 2018 Installment Note 6230 Interest expense 1620 Cash 7850 (being payment of installment) Dec 31 2019 Installment Note 6770 Interest expense 1080 Cash 7850 (being payment of installment) Dec 31 2020 Installment Note 7310 Interest expense 540 Cash 7850 (being payment of installment) Interest calculation: Ist installment interest = 5400*0.4=2160 2nd installment interest=5400*0.3= 1620 3rd installment interest = 5400*0.2=1080 4th installment interest = 5400*0.1=540