A Company Purchased Two New Trucks for a Total of $250,000

question 6

Essay

A company purchased two new trucks for a total of $250,000 on January 1, 2009. The company paid $40,000 cash and gave a $210,000, 3-year, 8% note for the remaining balance. The note is to be paid in three annual end-of-year payments beginning December 31, 2009. Assume the annual installment payments are to consist of equal amounts of principal plus accrued interest. Prepare a note amortization table using the format below.
$$\begin{array} { | l | c | c | c | c | c | } \hline \begin{array} { c } \text { Period } \\\text { Ending Date }\end{array} & \begin{array} { c } \text { Beginning } \\\text { Balance }\end{array} & \begin{array} { c } \text { Debit Interest } \\\text { Expense }\end{array} & \begin{array} { c } \text { Debit Notes } \\\text { Payable }\end{array} & \text { Credit Cash } & \begin{array} { c } \text { Ending } \\\text { Balance }\end{array} \\\hline 12 / 31 / 09 & & & & & \\\hline 12 / 31 / 10 & & & & & \\\hline 12 / 31 / 11 & & & & & \\\hline\end{array}$$ 12/31/09: Interest Expense: $210,000 x 8% = $16,800
12/31/10: Interest Expense: $140,000 x 8% = $11,200
12/31/11: Interest Expense: $70,000 x 8% = $5,600

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Definitions:

Inferential Statistics

A branch of statistics that makes predictions or inferences about a population based on a sample of data taken from that population.

Interpreting

The process of providing meaning to information or data, often by explaining its significance or implications.

Descriptive Statistics

Statistical methods used to summarize and describe the main features of a dataset.

Statistical Methods

Techniques and processes used in the collection, analysis, interpretation, and presentation of numerical data.