Dandy Candy bought a delivery vehicle for $45,000 by issuing an 8% installment note on January 1, 2021. Dandy will make 12 monthly payments of $3,914.50 at the end of each month. Cash Reduction of Note
Period Payment Interest Exp Note Payable Payable
(Credit) (Debit) (Debit) Balance
At issue --- --- --- $45,000.00
01/31/21 $3,914.50 $300.00 $3,614.50 41,385.50
02/28/21 3,914.50 ? ? ?
03/31/21 3,914.50 ? ? ?
04/30/21 3,914.50 ? ? ?
05/31/21 3,914.50 ? 3,711.85 26,684.93
Required:
Using the partially completed amortization table above, prepare the journal entries for the end of March and the end of April.

Dandy Candy

Journal Entries for the end of March and April:

03/31/21     Debit Note Payable $3,662.85

                  Debit Interest Expense $251.65

                  Credit Cash $3,914.50

To record payment of interest and note payable on March 31, 2021.

04/30/21     Debit Note Payable $3,687.27

                  Debit Interest Expense $227.23

                  Credit Cash $3,914.50

To record payment of interest and note payable on April 30, 2021.

Explanation:

a) Data and Calculations:

Cost of delivery vehicle = $45,000

Note Payable = $45,000

Interest rate on note = 8%

Date of issue of note = January 1, 2021

Monthly payments required = $3,914.50 for 12 months

Amortization Table

                    Cash                           Reduction of     Note

Period        Payment  Interest Exp Note Payable   Payable

                   (Credit)        (Debit)          (Debit)          Balance

At issue              ---           ---                ---           $45,000.00

01/31/21     $3,914.50  $300.00    $3,614.50       41,385.50

02/28/21     3,914.50      ?                 ?                   ?

03/31/21      3,914.50      ?                 ?                   ?

04/30/21     3,914.50      ?                 ?                   ?

05/31/21     3,914.50      ?                3,711.85       26,684.93

Amortization Table

                    Cash                           Reduction of     Note

Period        Payment  Interest Exp Note Payable   Payable

                   (Credit)        (Debit)          (Debit)          Balance

At issue              ---           ---                ---           $45,000.00

01/31/21     $3,914.50  $300.00    $3,614.50       41,385.50

02/28/21     3,914.50     275.90     3,638.50       37,746.90

03/31/21      3,914.50     251.65     3,662.85       34,084.05

04/30/21     3,914.50    227.23      3,687.27       30,396.78

05/31/21     3,914.50    202.65       3,711.85        26,684.93