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Up front, we prepare an Amortization Schedule for the life of the loan. (8%, 5 yrs)
Same loan, only with monthly payments.
Note: Monthly amount is not the annual amount/12.
60 monthly loan payments of $6,893.97 each
Work to dollars and cents (all numbers to two decimal places)
Do first three payments only
| Date | Beginning Loan Balance | (Debit) Interest Expense | (Debit) Notes Payable (Principal Reduction) | (Credit) Cash | Ending Balance |
| Column | A | B | C | D | E |
| Date | From prior periods ending balance | P x R x T | Col D Col B | Given | Col A Col C** |
| 1/1/2020 | 0 | | | | 340,000.00 |
| 12/31/2020 | | | | 6,893.97 | |
| 12/31/2021 | | | | 6,893.97 | |
| 12/31/2022 | | | | 6,893.97 | |
** NOTE: Subtract only the principal reduction from the prior balance, not the full payment
Answer & Explanation
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