Prepare all journal entries and adjusting journal entries necessary to record the information below for year 2022:

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Prepare all journal entries and adjusting journal entries necessary to record the information below for
year 2022:
On November 15, 2022, WTG purchased a patent for $49,500.
It used an installment loan to purchase the patent.
Payments are due on May 15 and November 15 of every year (so the first payment is due May 15
next year) for the next 5 years.
The interest rate is 7%.
See amortization table below:
■
Patent Loan Amortization
Principal
Interest
Years
Payments/year
Payment
Date
5/15/23
11/15/23
5/15/24
11/15/24
5/15/25
11/15/25
5/15/26
11/15/26
5/15/27
11/15/27
$49,500
7%
5
2
5,952
Interest Principal Payment Balance
49,500
5,952
45,281
5,952 40,913
5,952
36,393
5,952
5,952
5,952
5,952
5,952
5,952
5,952
1,733
4,219
1,585 4,367
4,520
4,678
4,842
941
5,011
765
5,187
584
5,368
396 5,556
201 5,751
1,432
1,274
1,110
31,715
26,873
21,862
16,675
11,307
5,751
0
Transcribed Image Text:Prepare all journal entries and adjusting journal entries necessary to record the information below for year 2022: On November 15, 2022, WTG purchased a patent for $49,500. It used an installment loan to purchase the patent. Payments are due on May 15 and November 15 of every year (so the first payment is due May 15 next year) for the next 5 years. The interest rate is 7%. See amortization table below: ■ Patent Loan Amortization Principal Interest Years Payments/year Payment Date 5/15/23 11/15/23 5/15/24 11/15/24 5/15/25 11/15/25 5/15/26 11/15/26 5/15/27 11/15/27 $49,500 7% 5 2 5,952 Interest Principal Payment Balance 49,500 5,952 45,281 5,952 40,913 5,952 36,393 5,952 5,952 5,952 5,952 5,952 5,952 5,952 1,733 4,219 1,585 4,367 4,520 4,678 4,842 941 5,011 765 5,187 584 5,368 396 5,556 201 5,751 1,432 1,274 1,110 31,715 26,873 21,862 16,675 11,307 5,751 0
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