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Zinc Corp. obtained a $100,000 loan from First Capital Bank on December 31, 2016. It purchased a piece of heavy equipment for $95,000 on January 2, 2017. The loan bears interest at 8% per year on the unpaid balance and is repayable in four annual blended payments of $30,192 on December 31 each year, starting in 2017.
| Required: | ||
| 1. | Prepare the journal entries to record the following transactions: | |
| a. | Receipt of loan proceeds from the bank | |
| b. | Purchase of the equipment. | |
| 2. |
Prepare the loan repayment schedule in the following format:
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| 3. | Prepare the journal entry to record the last loan payment. | |
| 4. | Prepare a partial balance sheet showing the loan liability at December 31, 2018. | |
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