Entries for Installment Note Transactions
On the first day of the fiscal year, Shiller Company borrowed $33,000 by giving a seven-year, 8% installment note to Soros Bank. The note requires annual payments of $6,404, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $2,640 and principal repayment of $3,764.
Journalize the entries to record the following:
a1. Issued the installment note for cash on the first day of the fiscal year. If an amount box does not require an entry, leave it blank.
a2. Paid the first annual payment on the note. If an amount box does not require an entry, leave it blank.
b.How would the notes payable be reported on the balance sheet at the end of the fiscal year?