Entries for Installment Note Transactions
On January 1 of 20Y2, Hebron Company issued a $52,000, 4-year, 11% installment note to Ventsam Bank. The note requires annual payments of $16,761, beginning on December 31 of 20Y2.
Journalize the entries to record the following.
20Y2
Jan. 1 Issued the note for cash at its face amount.
Dec. 31 Paid the annual payment on the note, which consisted of interest of $5,720 and principal of $11,041.
20Y5
Dec. 31 Paid the annual payment on the note, which included interest of $1,661. The remainder of the payment reduced the principal balance on the note.
Issued the note for cash at its face amount.
Year 1 Jan. 1
Paid the annual payment on the note, which consisted of interest of $5,720 and principal of $11,041. If an amount box does not require an entry, leave it blank.
Year 1 Dec. 31
Paid the annual payment on the note, which included interest of $1,661. The remainder of the payment reduced the principal balance on the note. If an amount box does not require an entry, leave it blank.
Year 4 Dec. 31
Entries for Installment Note Transactions
On January 1 of 20Y2, Hebron Company issued a $52,000, 4-year, 11% installment note to Ventsam Bank. The note requires annual payments of $16,761, beginning on December 31 of 20Y2.
Journalize the entries to record the following.
20Y2
Jan. 1 Issued the note for cash at its face amount.
Dec. 31 Paid the annual payment on the note, which consisted of interest of $5,720 and principal of $11,041.
20Y5
Dec. 31 Paid the annual payment on the note, which included interest of $1,661. The remainder of the payment reduced the principal balance on the note.
Issued the note for cash at its face amount.
Year 1 Jan. 1
Paid the annual payment on the note, which consisted of interest of $5,720 and principal of $11,041. If an amount box does not require an entry, leave it blank.
Year 1 Dec. 31
Paid the annual payment on the note, which included interest of $1,661. The remainder of the payment reduced the principal balance on the note. If an amount box does not require an entry, leave it blank.
Year 4 Dec. 31