Question: On December 31, 2017, Wildhorse Company signed a $1,105,800 note to Sheffield Bank. The market interest rate at that time was 11%. The stated interest rate on the note was 9%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Wildhorse's financial situation worsened. On December 31, 2019, Sheffield Bank determined that it was probable that the company would pay back only $663,480 of the principal at maturity. However, it was considered likely that interest would continue to be paid, based on the $1,105,800 loan.
Prepare a note amortization schedule for Sheffield Bank up to December 31, 2019. (Round answers to 0 decimal places, e.g. 5,275.)
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Note Amortization Schedule
(Before Impairment)
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Date
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Cash
Received
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Interest
Revenue
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Increase in Carrying
Amount
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Carrying
Amount of
Note
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| 12/31/17 |
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$
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| 12/31/18 |
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| 12/31/19 |
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