Exercise 1411 Installment note entries LO C1 On January 1 2

Exercise 14-11 Installment note entries LO C1 On January 1, 2 17, Eagle borrows sso o cash by signing a four-year, 7% installment note. The note requires four equal payments of 510,333, 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 8.4) (Use appropriate factor(s) from the tables provided. Round your intermediate calculations and final answers to the nearest dollar amount. Round all table values to 4 decimal places, and use the rounded table values in calculations.) 15 points Prepare the journal entries for Eagle to record the loan on January 1, 2017, and the four payments from December 31.2 December 31, 2020

Solution

Date

Account Titles & Explanation

Debit

Credit

Jan. 1, 2017

Cash

$35000

     Notes Payable

$35000

(To record borrowed money)

Dec. 31, 2017

Notes Payable ($10333 – $2450)

$7883

Interest expense ($35000 * 0.07)

$2450

     Cash

$10333

(To record installment payment)

Dec. 31, 2018

Notes Payable ($10333 – $1726.69)

$8606.31

Interest expense ($24667 * 0.07)

$1726.69

     Cash

$10333

(To record installment payment)

Dec. 31, 2019

Notes Payable ($10333 – $1003.38)

$9329.62

Interest expense ($14334 * 0.07)

$1003.38

     Cash

$10333

(To record installment payment)

Dec. 31, 2020

Notes Payable ($10333 – $280.07)

$10052.93

Interest expense ($4001 * 0.07)

$280.07

     Cash

$10333

(To record installment payment)

Date	Account Titles & Explanation	Debit	Credit
Jan. 1, 2017	Cash	$35000
	Notes Payable		$35000
	(To record borrowed money)
Dec. 31, 2017	Notes Payable ($10333 – $2450)	$7883
	Interest expense ($35000 * 0.07)	$2450
	Cash		$10333
	(To record installment payment)
Dec. 31, 2018	Notes Payable ($10333 – $1726.69)	$8606.31
	Interest expense ($24667 * 0.07)	$1726.69
	Cash		$10333
	(To record installment payment)
Dec. 31, 2019	Notes Payable ($10333 – $1003.38)	$9329.62
	Interest expense ($14334 * 0.07)	$1003.38
	Cash		$10333
	(To record installment payment)
Dec. 31, 2020	Notes Payable ($10333 – $280.07)	$10052.93
	Interest expense ($4001 * 0.07)	$280.07
	Cash		$10333
	(To record installment payment)