Pockets lent $20,000 to Lego Construction on January 1, 2018. Lego signed a three-year, 5% installment note to be paid in three equal payments at the end of each year.
Required:
(1.) Prepare the journal entry on January 1, 2018, for Pockets' lending the funds.
(2.) Calculate the amount of one installment payment.
(3.) Prepare an amortization schedule for the three-year term of the installment note.
(4.) Prepare Pockets' journal entry for the first installment payment on December 31, 2018.
(5.) Prepare Pockets' journal entry for the third installment payment on December 31, 2020.

Question

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The Answer of Pockets lent $20,000 to Lego Construction on January 1, 2018. Lego signed a three-year, 5% installment note to be paid in three equal payments at the end of each year.
Required:
(1.) Prepare the journal entry on January 1, 2018, for Pockets' lending the funds.
(2.) Calculate the amount of one installment payment.
(3.) Prepare an amortization schedule for the three-year term of the installment note.
(4.) Prepare Pockets' journal entry for the first installment payment on December 31, 2018.
(5.) Prepare Pockets' journal entry for the third installment payment on December 31, 2020.

Pockets Lent $20,000 to Lego Construction on January 1, 2018