On January 1, 2018. Trop al Paradise bomo s S3 1,000 by agreeing to a 6%, six-ye
ID: 2572211 • Letter: O
Question
On January 1, 2018. Trop al Paradise bomo s S3 1,000 by agreeing to a 6%, six-year note with the bank. The funds wil bo used to purchase a new BMW o nvertible for se in promoting resort properties to potential customers. Loan payments of $513.76 are due at the end of each month with the first installment due on January 31, 2018 Record the issuance of the installment note payable and the first two monthly payments. (Do not round intermediate calculations. Round your final answers to 2 decimal places. View transaction list Journal entry worksheet Record the issuance of a note payable. Note: Enter debits before credits Debit Credit Date General Journal January 01, 2018 View general journal Record entry Clear entry 5 7 8 9Explanation / Answer
1-
Month
opening Balance
Monthly payment
interest
principal
month end balance
date
explanation
debit
credit
0
31000
1-Jan
cash
31000
1
31000
513.76
155
358.76
30641.24
notes payable
31000
2
30641.24
513.76
153.2062
360.5538
30280.69
31-Jan
interest expense
155
notes payable
358.76
cash
513.76
28-Feb
interest expense
153.2062
notes payable
360.5538
cash
513.76
2-
Year
cash paid = 510000*7%
interest expense = carrying value *6%
Decrease in carrying value = cash paid -interest epxense
carrying value = carrying value- decrease in carrying value
Jan-18
547534
Dec 31 2018
35700
32852.04
2847.96
544686
Dec 31 2019
35700
32681.16
3018.838
541667.2
date
explanation
debit
credit
1-Jan
cash
547534
bonds payable
510000
premium on bonds payable
37534
Dec 31 2018
interest expense
32852.04
premium on bonds payable
2847.96
cash
35700
Dec 31 2019
interest expense
32681.16
premium on bonds payable
3018.838
cash
35700
1-
Month
opening Balance
Monthly payment
interest
principal
month end balance
date
explanation
debit
credit
0
31000
1-Jan
cash
31000
1
31000
513.76
155
358.76
30641.24
notes payable
31000
2
30641.24
513.76
153.2062
360.5538
30280.69
31-Jan
interest expense
155
notes payable
358.76
cash
513.76
28-Feb
interest expense
153.2062
notes payable
360.5538
cash
513.76
2-
Year
cash paid = 510000*7%
interest expense = carrying value *6%
Decrease in carrying value = cash paid -interest epxense
carrying value = carrying value- decrease in carrying value
Jan-18
547534
Dec 31 2018
35700
32852.04
2847.96
544686
Dec 31 2019
35700
32681.16
3018.838
541667.2
date
explanation
debit
credit
1-Jan
cash
547534
bonds payable
510000
premium on bonds payable
37534
Dec 31 2018
interest expense
32852.04
premium on bonds payable
2847.96
cash
35700
Dec 31 2019
interest expense
32681.16
premium on bonds payable
3018.838
cash
35700