nuary 1, 2017, Eagle borrows $100,000 cash by signing a four-year, 7% installmen

Question

nuary 1, 2017, Eagle borrows $100,000 cash by signing a four-year, 7% installment note. The 23, consisting of accrued interest and principal on December 31 of each year from 2017 thre B3, and Table B.4) (Use appropriate factor(s) from the tables provided. Round your answ are the journal entries for Eagle to record the loan on January 1, 2017, and the four payments ember 31, 2020. iew transaction list Journal entry worksheet Eagle borrows $100,000 cash by signing a four-year, 796 installment note. Record the issuance of the note on January 1, 2017. Note: Enter debits before credits. Date General Journal Debit Credit Jan 01, 2017 29,523

Explanation / Answer

Solution:

Journal Entries - Eagle Date Particulars Debit Credit 1-Jan-17 Cash Dr $100,000.00         To Notes Payable $100,000.00 (To record amount borrowed by issuing note) $0.00 31-Dec-17 Interest Expense Dr (100000*7%) $7,000.00 Notes Payable Dr $22,523.00         To Cash $29,523.00 (To record interest expense and first installment payment) 31-Dec-18 Interest Expense Dr [(100000-$22,523)*7%] $5,423.00 Notes Payable Dr $24,100.00         To Cash $29,523.00 (To record interest expense and installment payment) 31-Dec-19 Interest Expense Dr [(100000-$22,523-$24,100)*7%] $3,736.00 Notes Payable Dr $25,787.00         To Cash $29,523.00 (To record interest expense and installment payment) 31-Dec-20 Interest Expense Dr [(100000-$22,523-$24,100 - $25,787)*7%] $1,933.00 Notes Payable Dr $27,590.00         To Cash $29,523.00 (To record interest expense and installment payment)

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