On January 1, 2014, Zinn Company obtained a $39,000, four-year, 10% installment note from Fidelity Bank. The note requires annual payments of $12,303, beginning on December 31, 2014.
a. Prepare an amortization table for this installment note, similar to the one presented in Exhibit 3. Round the computation of the interest expense to the nearest whole dollar. Enter all amounts as positive numbers.
| Amortization of Installment Notes |
For the Year Ending |
January 1
Carrying Amount |
Note Payment
(Cash Paid) |
Interest Expense
(10% of January 1
Note Carrying Amount) |
Decrease in
Notes Payable |
December 31
Carrying Amount |
| December 31, 2014 |
$ |
|
|
$ |
|
|
$ |
|
|
|
|
$ |
|
|
$ |
|
|
| December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| December 31, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
|
|
|
$ |
|
|
$ |
|
|
|
|
$
|
|
|
b. Journalize the entries for the issuance of the note and the four annual note payments. For a compound transaction, if an amount box does not require an entry, leave it blank.
|