A Company Purchased Two New Delivery Vans for a Total

Essay

A company purchased two new delivery vans for a total of $250,000 on January 1,2009.The company paid $40,000 cash and signed a $210,000,3-year,8% note for the remaining balance.The note is to be paid in three annual end-of-year payments of $81,487 each,with the first payment on December 31,2009.Each payment includes interest on the unpaid balance plus principal.
(1)Prepare a note amortization table using the format below:
$$\begin{array} { | l | c | c | c | c | c | } \hline \begin{array} { c } \text { Period } \\\text { Ending Date }\end{array} & \begin{array} { c } \text { Beginning } \\\text { Balance }\end{array} & \begin{array} { c } \text { Debit Interest } \\\text { Expense }\end{array} & \begin{array} { c } \text { Debit Notes } \\\text { Payable }\end{array} & \text { Credit Cash } & \begin{array} { c } \text { Ending } \\\text { Balance }\end{array} \\\hline 12 / 3109 & & & & & \\\hline 12 / 31 / 10 & & & & & \\\hline 12 / 31 / 11 & & & & & \\\hline\end{array}$$
(2)Prepare the general journal entries to record the purchase of the vans on January 1,2009 and the second annual installment payment on December 31,2010.