Prepare the journal entry for the purchase of the oven

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Natalie and Curtis have been experiencing great demand for their cookies and muffins. As a result, they are now thinking about buying a commercial oven. They know which oven they want and that it will cost $17,000. The company already has $5,000 set aside for the purchase and will need to borrow the rest.

Natalie and Curtis met with a bank manager to discuss their options. She is willing to lend Cookie & Coffee Creations Inc. $12,000 on November 1, 2020, for 3 years at a 5% interest rate. The terms provide for fixed principal payments of $2,000 on May 1 and November 1 of each year plus 6 months of interest.

Question 1: Prepare a payment schedule for the life of the note.

Question 2: Prepare the journal entry for the purchase of the oven and the issue of the note payable on November 1, 2020.

Question 3: Prepare the journal entries on May 1 and November 1 for the note.

Question 4: Determine the current portion of the note payable and the long-term portion of the note payable at October 31, 2021.

Reference no: EM132886006

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