Problem
Journal Entries, Year 2
1. What is the yearly payment amount require for Note Payable (assume its an installment note)?
2. What is the interest rate on the Note Payable?
JOURNAL
|
DATE
|
DESCRIPTION
|
POST. REF.
|
DEBIT
|
CREDIT
|
1
|
Jun. 30
|
Interest Expense
|
|
18,427.00
|
|
2
|
|
Premium on Bonds Payable
|
|
2,948.00
|
|
3
|
|
Cash
|
|
|
21,375.00
|
4
|
30
|
Interest Expense
|
|
41,560.00
|
|
5
|
|
Discount on Bonds Payable
|
|
|
6,560.00
|
6
|
|
Cash
|
|
|
35,000.00
|
7
|
30
|
Bonds Payable
|
|
2,000,000.00
|
|
8
|
|
Gain on Redemption of Bonds
|
|
|
41,000.00
|
9
|
|
Discount on Bonds Payable
|
|
|
65,600.00
|
10
|
|
Cash
|
|
|
1,893,400.00
|
11
|
Sep. 30
|
Interest Expense
|
|
67,500.00
|
|
12
|
|
Interest Payable
|
|
22,500.00
|
|
13
|
|
Notes Payable
|
|
342,887.00
|
|
14
|
|
Cash
|
|
|
432,887.00
|
15
|
Dec. 31
|
Interest Expense
|
|
17,357.00
|
|
16
|
|
Interest Payable
|
|
|
17,357.00
|
17
|
31
|
Interest Expense
|
|
18,427.00
|
|
18
|
|
Premium on Bonds Payable
|
|
2,948.00
|
|
19
|
|
Cash
|
|
|
21,375.00
|
20
|
31
|
Income Summary
|
|
163,271.00
|
|
21
|
|
Interest Expense
|
|
|
163,271.00
|
22
|
31
|
Bonds Payable
|
|
475,000.00
|
|
23
|
|
Premium on Bonds Payable
|
|
23,584.00
|
|
24
|
|
Loss on Redemption of Bonds
|
|
20,600.00
|
|
25
|
|
Cash
|
|
|
519,184.00
|