Answer & Explanation:
1- What would be the amount of each installment?
The principal to be paid in each instalment = $300,000/3 = $100,000
1st instalment = $300,000*5% + $100,000 = $115,000
2nd instalment = $200,000*5% + $100,000 = $110,000
3rd installment = $100,000*5% +$100,000 = $105,000
2- Prepare an amortization table for the instalment note.
Please see excel in attachment
3- Prepare the journal entry for the second installment payment.
Debit loan payables account: $100,000
Debit Interest expenses: $10,000
Credit cash: $110,000
