Problem
On November 1, 2011, Leetch Ltd. borrows $430,000 cash from a bank by signing a five-year installment note bearing 5% interest. The note requires equal total payments each year on October 31. (Use Table B.3)
Required:
1. Compute the total amount of each installment payment.
2. Complete an amortization table for this installment note.
3. Prepare the journal entries in which Leetch records the following:
(a) Accrued interest as of December 31, 2011 (the end of its annual reporting period).
(b) The first annual payment on the note.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.