Interest-bearing note payble (equal installments)
2023
4/1 Cash 6,000,000
Note Payable 6,000,000
12/31 Interest Expense 540,000
Interest Payable/Accrued 540,000
2024
3/31 Interest Payable 540,000
Interest Expense 180,000 630,000
Cash 720,000
Note Payable 1,000,000
Cash 1,000,000
12/31 Interest Expense 450,000
Interest Payable/Accrued 450,000
2025
3/31 Interest Payable 450,000
Interest Expense 150,000 510,000
Cash 600,000
Note Payable 1,000,000
Cash 1,000,000
12/31 Interest Expense 360,000
Interest Payable/Accrued 360,000
Non-interest bearing 0.547034 2,735,170
9% 5,000,000
Date Interest ExpenseCarrying Amount 2,264,830
10/1/23 2,735,170
10/1/24 246,165 2,981,335
10/1/25 268,320 3,249,655 Interest -2024 246,165
10/1/26 292,469 3,542,124 Interest -2025 268,320
10/1/27 318,791 3,860,916
10/1/28 347,482 4,208,398
10/1/29 378,756 4,587,154
10/1/30 412,846 5,000,000 Carrying amount 10/1/24
2,264,830 Partial amortization
Carrying amount 12/31/2
2023 Other Method:
10/1 Cash 2,735,170 Face amount
Discount on N/P 2,264,830 Less amortization:
N/P 5,000,000 Carrying amount 12/31/2
2024
10/1 Interest Expense 246,165
Discount on N/P 246,165 Interest -2025
Interest -2026
2025
10/1 Interest Expense 268,320
Discount on N/P 268,320 Carrying amount 10/1/25
Partial amortization
Carrying amount 12/31/2
2030 Other Method:
10/1 Interest Expense 412,846 Face amount
Discount on N/P 412,846 Less amortization:
Carrying amount 12/31/2
N/P 5,000,000
Cash 5,000,000
2024
184,624 184,624
67,080 67,080
251,704 251,704
2,981,335
67,080
3,048,415
5,000,000
1,951,585
3,048,415
2025
201,240 1/1-10/1
73,117 10/1-12/31
274,357
3,249,655
73,117
3,322,773
5,000,000
1,677,227
3,322,773
Non-interest bearing note (installment) 1,750,000 3.169865 5,547,264
10% 1,452,736
Date Annual InstallmentInterest Expense Carrying Amount
7/1/23 5,547,264
6/30/24 1,750,000 554,726 4,351,990
6/30/25 1,750,000 435,199 3,037,189
6/30/26 1,750,000 303,719 1,590,908
6/30/27 1,750,000 159,092 0
Carrying amount 7/1/23 5,547,264
Partial amortization7/2 -12/31 277,363 2025
Carrying amount 12/31/23 5,824,627 217,600
2024 151,859
554,726 1/1/24-6/30/24 277,363 369,459
435,199 7/1/24-12/31/24 217,600
494,963
Carrying amount 6/30/24 4,351,990
Partial amortization7/2 -12/31 217,600
Carrying amount 12/31/24 4,569,590
Face Amount 7,000,000
Less: Amortization 680,410
Less: Annual Installment 1,750,000
Carrying amount 12/31/24 4,569,590
Interest-bearing note
2% 10%
Date Interest Paid Interest Expense Amortization Carrying Amount
1/1/23 4,067,475
12/31/23 160,000 406,747 246,747 4,314,222
12/31/24 160,000 431,422 271,422 4,585,644
12/31/25 160,000 458,564 298,564 4,884,209
1/1/23 Cash 4,067,475
Discount on N/P 3,932,525
Note Payable 8,000,000
12/31/23 Interest Expense 160,000
Cash 160,000
Interest Expense 246,747
Discount on N/P 246,747
Or
Interest Expense 406,747
Cash 160,000
Discount on N/P 246,747
PV of principal 8,000,000 0.385543 3,084,344
Pv of interesst 160,000 6.144567 983,131
ng Amount 4,067,475
8,000,000
3,932,525
2023
12/31 Interest Expense 157,500
Interest Payable 157,500
Unrealized Loss - P/L 100,000
Note Payable 100,000
2024
3/31 Interest Payable 157,500
Interest Expense 52,500
Cash 210,000
12/31 Interest Expense 157,500
Interest Payable 157,500
Interest expense - 2024 210,000
Loss in Change in FV 60,000
Net decrease - P/L 270,000
Unrealized Loss - P/L 60,000
Unrealized Loss - OCI 30,000
Note Payabvle 90,000
Step 1:
PV of principal 5,000,000 0.63017 3,150,850
PV of interest 350,000 4.62288 1,618,008
Carrying amount -12/31/23 4,768,858
Step 2:
4%
Step 3: 7.5%
PV of principal 5,000,000 0.647962 3,239,810
PV of interest 350,000 4.693846 1,642,846
4,882,656
Step 4:
P/L (117,344) gain
OCI (113,798) gain
Financial Liability/ N/P 231,142
Unrealized gain - P/L 117,344
Unrealized gain - OCI 113,798 4,768,858