Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac

Exercise 50

Journalizing installment notes
On the first day of the fiscal year, a company issues $65,000, 6%, five-year installment notes that have annual payments of $15,431. The first note payment consists of $3,900 of interest and $11,531 of principal repayment.
a. Journalize the entry to record the issuance of the installment notes.
b. Journalize the first annual note payment.