In Order to Expand Its Business,the Management of Hampton,Inc

question 25

Essay

In order to expand its business,the management of Hampton,Inc.issued a long-term notes payable for $50,000 on January 1,2018.The note will be paid over a 10-year period with equal annual principal payments,December 31 of each year.The annual interest rate is 12%.Prepare the journal entry for the first installment payment.Omit explanation.

---

Definitions:

Intra-entity Gross Profit

The profit recognized on transactions within different parts of the same company.

Consolidation Worksheet

A financial tool used to merge and organize the financial information of parent and subsidiary companies for reporting purposes.

Gross Profit Rate

A financial ratio that represents the portion of each dollar of revenue that remains after deducting the cost of goods sold, indicating the efficiency of production and pricing.