On January 1,2010,a company borrowed $50,000 cash by signing a 7% installment note that is to be repaid with 5 annual end-of-year payments,the first of which is due on December 31,2010.
(a)Prepare the company's general journal entry to record the note's issuance.
(b)Assume that the annual payments are to consist of accrued interest plus equal amounts of principal.Prepare the general journal entries to record the first and second installment payments.

Question

Quizplus · Accepted Answer

The Answer of On January 1,2010,a company borrowed $50,000 cash by signing a 7% installment note that is to be repaid with 5 annual end-of-year payments,the first of which is due on December 31,2010.
(a)Prepare the company's general journal entry to record the note's issuance.
(b)Assume that the annual payments are to consist of accrued interest plus equal amounts of principal.Prepare the general journal entries to record the first and second installment payments.

On January 1,2010,a Company Borrowed $50,000 Cash by Signing a 7