On January 1, 2015, Eagle borrows $18,000 cash by signing a four-year, 9% instal

Question

On January 1, 2015, Eagle borrows $18,000 cash by signing a four-year, 9% installment note. The note requires four equal total payments of accrued interest and principal on December 31chear from 2015 through 2018. Compute the amount of each of the four equaltotal payments. Principal Interest Rate Number of annual Annual payment Prepare an amortization table for this installment note. Round your intermediate calculations to the nearest dollar amount.) Period Ending Beginni Interes Priip Total Ending Date ng al Payme Balanc Record the note issuance Record the first annual payment (12131/15) Record the last annual payment (1213118)

Explanation / Answer

Principal = $18,000

Interest Rate = 9%

Number of Annual Payment = 4

Annual Payment for Principal = $18,000/4 = $4,500

Amortization Table for Installement Note (Amounts in $)

Journal Entries (Amounts in $)

Period Ending Date Beginning Balance (A) Interest (B = A*9%) Principal (C) Total Payment (D= B+C) Ending Balance (E = A-C) 12/31/15 18,000 1,620 4,500 6,120 13,500 12/31/16 13,500 1,215 4,500 5,715 9,000 12/31/17 9,000 810 4,500 5,310 4,500 12/31/18 4,500 405 4,500 4,905 0 Total 4,050 18,000 22,050

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