On january 1, shady creek resort borrowed $250,000 cash by signing a 10-year, 8% installment note requiring annual equal payments each december 31 of $37,258. what is the journal entry to record the second annual payment? on january 1, shady creek resort borrowed $250,000 cash by signing a 10-year, 8% installment note requiring annual equal payments each december 31 of $37,258. what is the journal entry to record the second annual payment?

December 31, year 2, second annual payment

Explanation:

The first annual payment included a $20,000 interest (= $250,000 x 8%), therefore the principal was only reduced by $17,258 (= $37,258 - $20,000). Remaining principal = $250,000 - $17,258 = $232,742  

The second annual payment included a $18,619 interest (= $232,742 x 8%), therefore the principal was reduced by $18,639.

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.