Problem 7-8 On December 31, 2017, Sarasota Inc. rendered services to Beghun Corp

Question

Problem 7-8 On December 31, 2017, Sarasota Inc. rendered services to Beghun Corporation at an agreed price of $107,016, accepting $41,400 down and agreeing to accept the balance in four equal installments of $20,700 receivable each December 31. An assumed interest rate of 10% is imputed. Prepare an amortization schedule. Assume that the effective-interest method is used for amortization purposes. (Round answers to 0 decimal places, e.g.5,275.) December 31, 2017 Schedule of Note Discount Amortization Cash Received Interest Revenue Carrying Amount of Note Date 12/31/17 $ 12/31/18 12/31/19 12/31/20 12/31/21

Explanation / Answer

Date Cash Received Interest Revenue Carrying Amount of note 12/31/2017                 41,400 0                                       65,616 12/31/2018                 20,700                    6,561.60                                 51,477.60 12/31/2019                 20,700                    5,147.76                                 35,925.36 12/31/2020                 20,700                    3,592.54                                 18,817.90 12/31/2021                 20,700                    1,881.79                                                -   Date Explanation Debit   Credit 12/31/2017 Cash          41,400 Notes Receivable          65,616 Service Revenue    107,016 12/31/2018 Cash          20,700 Interest Income         6,562 Notes Receivable      14,138 12/31/2019 Cash          20,700 Interest Income         5,148 Notes Receivable      15,552 12/31/2020 Cash          20,700 Interest Income         3,593 Notes Receivable      17,107 12/31/2020 Cash          20,700 Interest Income         1,882 Notes Receivable      18,818

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---