Exercise 10-6 On July 1, 2017, Granvile Ltd. borrowed $19,300 by signing a two-y

Question

Exercise 10-6 On July 1, 2017, Granvile Ltd. borrowed $19,300 by signing a two-year 4% note payable. The note is payable in two annual blended principa and interest instalments of $10,233 on June 30. Adjusting ournal entries are recorded annually at year end on December 31 Prepare an instalment payment schedule for the term of the note. (Round answers to the nearest whole dollar, e.g. 5,255.) Annual Interest Period Cash Payment Interest Expense Reduction of Principal Principal Balance July 1, 2017 une 30, 2018 June 30, 2019 LINK TO TEXI

Explanation / Answer

Interest is arrived at by multiplying outstanding principal balance with 4% for the proportionate period.

Annual interest period Cash payment Interest exp Reduction of principal Principal balance Jul 1, 2017                   19,300 Jun 30, 2018              10,233               772                               9,461                     9,839 Jun 30, 2019              10,233               394                               9,839                            -  

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