On January 1, 2013, Eagle borrows $33,000 cash by signing a four-year, 6% installment note. The note requires four equal total payments of accrued interest and principal on December 31 of each year from 2013 through 2016. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.)
1.
Compute the amount of each of the four equal total payments.
2.
Prepare an amortization table for this installment note. (Round your intermediate calculations to the nearest dollar amount.)
Explanation:1.
| Amount of each payment | = | Initial note balance / Table B.3 value |
| = | $33,000 / 3.4651 = $9,524 |
2.
| Beginning Balance = Prior Ending Balance | |
| Debit Interest Expense = 6% × Beginning Balance | |
| Debit Notes Payable = Credit Cash – Debit Interest Expense | |
| Credit Cash = computed | |
| Ending Balance = Beginning Balance – Debit Notes Payable |