Q1) Catter Company bought equipment on November 15, 2008. Company paid $10,000 cash and borrowed remaining balance of $90,000 from its bank for period of 10 years at annual interest rate of 12%. Note is payable in monthly instalments of $1,250.
a. Make partial amortization table illustrating original balance of this note, and allocation of first two monthly payments between interest expense and reduction in note's unpaid balance.
b. Make journal entries on November 15 to record receipt of note, December 15, January 15 to record monthly payment, and on December 31 to record adjusting entry.