Installment note; amortization schedule [LO14-3]
1 answer:
Answer:
Annuity to be paid:
5,300,000 = Annuity * Present value interest factor of annuity, 10%, 4 years
5,300,000 = Annuity * 3.16986
Annuity = 5,300,000 / 3.16986
= $1,671,995.4950
= $1,671,995
1.
Date Account Title Debit Credit
Jan 1 , 2021 Right of Use Asset $5,300,000
Lease Payable $5,300,000
3.
Date Account Title Debit Credit
Dec 31 , 2021 Interest expense $530,000
Lease Payable $1,141,995
Cash $1,671,995
4.
Date Account Title Debit Credit
Dec 31 , 2023 Interest expense $290,181
Lease Payable $1,381,814
Cash $1,671,995
Question 2 is attached.
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