Finance Co lent $9.8 million to Corbin Construction on January 1, 2021, to construct a playground. Corbin signed a three-year, 5% installment note to be paid in three equal payments at the end of each year. (FV of $1, PV of $1. FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry for FinanceCo's lending the funds on January 1, 2021. 2. Prepare an amortization schedule for the three-year term of the installment note. 3. Prepare the journal entry for the first installment payment on December 31, 2021. 4. Prepare the journal entry for the third installment payment on December 31, 2023.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Finance Co lent $9.8 million to Corbin Construction on January 1, 2021, to construct a playground. Corbin signed a three-year, 5%
installment note to be paid in three equal payments at the end of each year. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and
PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Required:
1. Prepare the journal entry for FinanceCo's lending the funds on January 1, 2021.
2. Prepare an amortization schedule for the three-year term of the installment note.
3. Prepare the journal entry for the first installment payment on December 31, 2021.
4. Prepare the journal entry for the third installment payment on December 31, 2023.
Complete this question by entering your answers in the tabs below.
Req 2 Req 1 3 and 4
Prepare an amortization schedule for the three-year term of the installment note. (Enter your answers in whole dollars.)
Decrease in
Balance
Outstanding
Balance
Dec. 31 Cash Payment Effective Interest
2021
2022
2023
3,598,641
3,598,641
3,598,641
10,795,923
490,000
334,568
171,364
995,932
3,108,641
3,264,073
3,427,277
9,799,991
< Req 2
9,800,000
6,691,359
3,427,286
9
Req 1 3 and 4 >
Transcribed Image Text:Finance Co lent $9.8 million to Corbin Construction on January 1, 2021, to construct a playground. Corbin signed a three-year, 5% installment note to be paid in three equal payments at the end of each year. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry for FinanceCo's lending the funds on January 1, 2021. 2. Prepare an amortization schedule for the three-year term of the installment note. 3. Prepare the journal entry for the first installment payment on December 31, 2021. 4. Prepare the journal entry for the third installment payment on December 31, 2023. Complete this question by entering your answers in the tabs below. Req 2 Req 1 3 and 4 Prepare an amortization schedule for the three-year term of the installment note. (Enter your answers in whole dollars.) Decrease in Balance Outstanding Balance Dec. 31 Cash Payment Effective Interest 2021 2022 2023 3,598,641 3,598,641 3,598,641 10,795,923 490,000 334,568 171,364 995,932 3,108,641 3,264,073 3,427,277 9,799,991 < Req 2 9,800,000 6,691,359 3,427,286 9 Req 1 3 and 4 >
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