(Notes Receivable Journal Entries) On December 31, 2017, Oakbrook Inc. rendered services to Beghun Corporation at an agreed price of \(102,049, accepting \)40,000 down and agreeing to accept the balance in four equal installments of $20,000 receivable each December 31. An assumed interest rate of 11% is imputed.

Instructions

Prepare the entries that would be recorded by Oakbrook Inc. for the sale and the receipts and interest on the following dates (prepare an amortization schedule). (Assume that the effective-interest method is used for amortization purposes.)

(a) December 31, 2017.

(b) December 31, 2018.

(c) December 31, 2019.

(d) December 31, 2020.

(e) December 31, 2021.

Date

Accounts and Explanation

Debit $

Credit $

31 Dec 2017

Cash

$40,000

Note receivable

$62,049

Service revenue

$102,049

31 Dec 2018

Cash

$20,000

Note receivable

$20,000

Note receivable

$6,825.39

Interest revenue

$6,825.39

31 Dec 2019

Cash

$20,000

Note receivable

$20,000

Note receivable

$5,376.18

Interest revenue

$5,376.18

31 Dec 2020

Cash

$20,000

Note receivable

$20,000

Note receivable

$3,767.56

Interest revenue

$3,767.56

31 Dec 2021

Cash

$20,000

Note receivable

$20,000

Note receivable

$1,981.99

Interest revenue

$1,981.99

$200,000

$200,000

Date

Cash received

Interest Revenue @ 11%

Carrying amount of note

31 Dec 2017

-

-

$62,049

31 Dec 2018

$20,000

$6,825.39

$48,874.39

31 Dec 2019

$20,000

$5,376.18

$34,250.57

31 Dec 2020

$20,000

$3,767.56

$18018.13

31 Dec 2021

$20,000

$1,981.99

$0