On January 1, Yeargan Company obtained a $125,000, 7-year 5% installment note from Farmers Bank. The note requires annual payments of $21,602, with the first payment occurring on the last day of the fiscal year. The first payment consists of $6,250 interest and principal repayment of $15,352.

Journalize the following entries:
(a) Issued the installment note for cash on January 1.
(b) Paid the first annual payment on the note.

Question

On January 1, Yeargan Company obtained a $125,000, 7-year 5% installment note from Farmers Bank. The note requires annual payments of $21,602, with the first payment occurring on the last day of the fiscal year. The first payment consists of $6,250 interest and principal repayment of $15,352.
​
Journalize the following entries:
(a) Issued the installment note for cash on January 1.
(b) Paid the first annual payment on the note.
​

Quizplus · Accepted Answer

The Answer of On January 1, Yeargan Company obtained a $125,000, 7-year 5% installment note from Farmers Bank. The note requires annual payments of $21,602, with the first payment occurring on the last day of the fiscal year. The first payment consists of $6,250 interest and principal repayment of $15,352.
​
Journalize the following entries:
(a) Issued the installment note for cash on January 1.
(b) Paid the first annual payment on the note.
​

On January 1, Yeargan Company Obtained a $125,000, 7-Year 5