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g On July 1, Shady Creek Resort borrowed $320,000 cash by signing a 10-year, 11.5% installment note requiring equal payments each June 30 of $55,480. What amount of interest expense will be included in the first annual payment

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Tundexi

Answer:

Interest portion for one year = $320,000 * 11.5% =  $36,800

Total installment paid = $55,480

So, principal portion repaid = $55,480 -  $36,800 = $18,680

                               Journal entry

Date    General journal      Debit          Credit

           Interest expense    $36,800

           Notes payable        $18,680

                 To Cash                              $55,480

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