Roblin Manufacturing Inc. intends to finance the acquisition of new manufacturing equipment that costs $150,000 by issuing a 5-year, 3.5% note payable. The note would be issued on January 1, 2014. Roblin's year end is December and would require annual payments on December 31. The finance company has given Roblin the choice of making blended payments of $33,222, or making fixed payments of $30,000 plus interest.
Instructions
a. Assuming the blended payment option is selected; prepare the amortization table for the first two years of the note payable. Record the issue of the note and the December 31, 2014 payment under this alternative.
b. Assuming the fixed principal payment option is selected; prepare the amortization table for the first two years of the note payable. Record the December 31, 2014 payment under this alternative.

Question

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The Answer of Roblin Manufacturing Inc. intends to finance the acquisition of new manufacturing equipment that costs $150,000 by issuing a 5-year, 3.5% note payable. The note would be issued on January 1, 2014. Roblin's year end is December and would require annual payments on December 31. The finance company has given Roblin the choice of making blended payments of $33,222, or making fixed payments of $30,000 plus interest.
Instructions
a. Assuming the blended payment option is selected; prepare the amortization table for the first two years of the note payable. Record the issue of the note and the December 31, 2014 payment under this alternative.
b. Assuming the fixed principal payment option is selected; prepare the amortization table for the first two years of the note payable. Record the December 31, 2014 payment under this alternative.