Tony’s favorite memories of his childhood were the times he spent with his dad a
ID: 2511400 • Letter: T
Question
Tony’s favorite memories of his childhood were the times he spent with his dad at camp. Tony was daydreaming of those days a bit as he and Suzie jogged along a nature trail and came across a wonderful piece of property for sale. He turned to Suzie and said, “I’ve always wanted to start a camp where families could get away and spend some quality time together. If we just had the money, I know this would be the perfect place.” They called several banks and on January 1, 2020, Great Adventures obtained a $430,000, 6%, 8-year installment loan from Summit Bank. Payments of $5,651 are required at the end of each month over the life of the 8-year loan. Each monthly payment of $5,651 includes both interest expense and principal payments (i.e., reduction of the loan amount).
Late that night Tony exclaimed, “$430,000 for our new camp, this has to be the best news ever.” Suzie snuggled close and said, “There’s something else I need to tell you, Tony, I’m expecting!” They decided right then, if it was a boy, they would name him Venture.
Required:
1. Complete the first three rows of an amortization table.
2. Record the note payable on January 1, 2020, and the first two payments on January 31, 2020, and February 28, 2020. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)
Required 1. Complete the first three rows of an amortization table Interest Decrease in carrying Value Date 01/01/2020 01/31/2020 02/28/2020 Cash Paid Carrying Value Carrying ValueExplanation / Answer
Date Cash paid Interest expense Decrease in carrying value Carrying value 1/1/2020 430000 1/31/2020 5651 2150 3501 426499 2/28/2020 5651 2132 3519 422980 2 1/1/2020 Cash 430000 Notes payable 430000 1/31/2020 Interest expense 2150 Notes payable 3501 Cash 5651 2/28/2020 Interest expense 2132 Notes payable 3519 Cash 5651