Novacore 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, 2021. Novacore's year end is December and the note would require annual payments on December 31. The finance company has given Novacore 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, 2021 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, 2021 payment under this alternative.

Question

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The Answer of Novacore 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, 2021. Novacore's year end is December and the note would require annual payments on December 31. The finance company has given Novacore 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, 2021 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, 2021 payment under this alternative.