Information Company Purchased an Asset with a Cash Equivalent Value

Essay

Information Company purchased an asset with a cash equivalent value of $70,000 on January 1, 2016. Arrangements were made with the supplier to pay $10,000 cash on January 1, 2016, and the balance was to be paid over a three-year period, with equal annual payments of $24,553 to be made at the end of 2016, 2017, and 2018. Each payment will include principal plus interest on the unpaid balance at 11% per year.
Required:
A.Complete the following table:

B.Prepare the journal entry for the payment on December 31, 2017.
C.Explain the change, over time, on the amount of interest and the balance of the debt principal.