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The following amortization schedule indicates the interest and principal that Chip’s Cookie Corporation (CCC) must repay on an installment note established January 1, 2018. CCC has a December 31 year-end and makes the required annual payments on December 31. Use the amortization schedule to prepare CCC’s required journal entries on (a) January 1, 2018; (b) December 31, 2018; (c) December 31, 2019; (d) December 31, 2020; and (e) December 31, 2021. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.)

Respuesta :

temmydbrain

Answer:

Check the explanation

Explanation:

Date                          General Journal                      Debit                  Credit

Jan.1, 2015              Cash or Purchases                $30,000

                                   Notes Payable                                            $30,000

Dec.31, 2015               Notes Payable                    $6,960

                          Interest Expense                         $1,500

                                           Cash                                                         $8,460

Dec.31, 2016             Notes Payable                     $7,308

                        Interest Expense                          $1,152

                                  Cash                                                                $8,460

Dec.31, 2017              Notes Payable                     $7,673

                         Interest Expense                           $787

                                         Cash                                                          $8,460

Dec.31, 2018               Notes Payable                    $8,059

                          Interest Expense                           $401

                                         Cash                                                           $8,460

The Annual payment for notes payable is $8,460 (which includes interest and principal repayment)

anthougo

Based on the amortization schedule, the following journal entries are prepared for Chip's Cookie Corporation:

a) January 1, 2018:

Debit Cash $30,000

Credit Note Payable $30,000

  • To record issuance of the installment note.

b) December 31, 2018:

Debit Interest Expense $1,500

Debit Note Payable $6,960

Credit Cash $8,460

  • To record the first installment repayment and interest.

c) December 31, 2019:

Debit Interest Expense $1,152

Debit Note Payable $7,308

Credit Cash $8,460

  • To record the second installment repayment and interest.

d) December 31, 2020:

Debit Interest Expense $787

Debit Note Payable $7,673

Credit Cash $8,460

  • To record the third installment repayment and interest.

e) December 31, 2021:

Debit Interest Expense $401

Debit Note Payable $8,059

Credit Cash $8,460

  • To record the last installment repayment and interest.

Data and Calculations:

Note Payable = $30,000

Interest rate = 5% ($1,500/$30,000 x 100)

Date of issuance = January 1, 2018

Date of maturity = December 31, 2021

Maturity period = 4 years

Question Completion:

Amortization Schedule

Year       Beginning        Interest      Principal       Ending  

           Note Payable    Expense     Repaid       Note Payable  

1      30,000           1,500       6,960       23,040

2      23,040            1,152       7,308        15,732

3       15,732             787       7,673               8,059

4       8,059             401      8,059                      0

Total                    3,840   30,000

Learn more: https://brainly.com/question/22984928

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