On November 1, 2007, Norwood borrows $540,000 cash from a bank by signing a six-year installment not bearing 9% interest. The note requires equal total payments each year on October 31.
1. Compute the total amount of each installment payment. Use the present value table
2. Compute an amortization table for this installment note similar
Period end date Beg Balance. Debit interest Exp. Debit notes payable Credit cash End Balance
3. Prepare the journal entries in which Norwood records the following:
A. accrued interest as of December 31, 2007 (the end of its annual reporting period)
B. the first annual payment on the note
The solution explains how to calculate the installment amount, make an amortization table and pass the required journal entries