On January 1, 2019, a company borrows $1,000 cash by signing a four-year, 5% installment note. The note requires four equal payments of $282, consisting of accrued interest and principal on December 31 of each year from 2019 through 2022. 1. Prepare an amortization table for this installment note like the one in Exhibit 14.12. 2. Prepare journal entries to record the loan on January 1, 2019, and the four payments from December 31, 2019, through December 31, 2022.

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A: Formula: Interest expense = Notes amount x Interest rate x Time period

Q: for the interest income for 2020

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Q: Required information [The following information applies to the questions displayed below.] On…

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A: Journal: Recording of a business transactions in a chronological order.

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A:

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A: At first, we will find out the present value of the note payable.

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Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.