中级会计分期付款.ppt

American Food Services, Inc., acquired a packaging machine from Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2011. In payment for the $4 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 10%. 1.Prepare the journal entry for American Food Services purchase of the machine on January 1, 2011. 2.Prepare an amortization schedule for the four-year term of the installment note. 3. Prepare the journal entry for the first installment payment on December 31, 2011. 4. What the total amount of payment on December 31,2014? 3. December 31, 2011 Interest expense (10% x outstanding balance) 400,000Note payable (difference) 861,881 Cash (payment determined above) 1,261,881 4. December 31, 2013 1,261,881*4=5047524 December 31, 2011 4,000,000/4+4,000,000*10%=1,400,000 December 31, 2012 4,000,000/4+(4,000,000- 4,000,000/4)*10%=1,300,000 December 31, 2013 4,000,000/4+(4,000,000- 4,000,000/4 *2)*10%=1,200,000 December 31, 2014 4,000,000/4+(4,000,000- 4,000,000/4 *3)*10%=1,100,000 January 1, 2011 Machinery 4,000,000 Notes payable 4,000,000 December 31, 2011 Interest expense (10% x outstanding balance) 400,000Note payable (difference) 1,000,000 Cash (payment determined above) 1,400,000 End of Chapter 9 9 - * 9 - * 9 - * January 1, 2011 Machinery 4,000,000 Notes payable 4,000,000 2. Amortization schedule $4,000,000 ÷ 3.16987 = $1,261,881 amount (from Table 4) installmentof loan n=4, i=10% payment Dec.31 Cash Effective Decrease in Outstanding Payment Inter