FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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On 1/1/19, Lantana Loan Co., a calendar-year company, accepts a 5%, $500,000 three-year loan that pays interest semi-annually on 6/30 and
12/31 from Diamond Distributors, when the market rate of interest was 10%. In exchange for the note, Diamond agrees to make semi-annual
Interest payments and repay the full $500,000 at maturity. Complete the amortization table for this note, then complete all journal entries for
2019.
Answer: Beginning note balance is calculated using Excel PV function with the following inputs:
Amortization Table:
Journal Entries:
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Transcribed Image Text:On 1/1/19, Lantana Loan Co., a calendar-year company, accepts a 5%, $500,000 three-year loan that pays interest semi-annually on 6/30 and 12/31 from Diamond Distributors, when the market rate of interest was 10%. In exchange for the note, Diamond agrees to make semi-annual Interest payments and repay the full $500,000 at maturity. Complete the amortization table for this note, then complete all journal entries for 2019. Answer: Beginning note balance is calculated using Excel PV function with the following inputs: Amortization Table: Journal Entries:
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