What is the interest rate on the note payable

Assignment Help Accounting Basics

Reference no: EM131884826

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

Reference no: EM131884826

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