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A partial amortization schedule for a 10-year note payable issued on January 1, Year 1, is shown next:

Accounting Period	Principal Balance January 1			Cash Payment			Applied to Interest			Applied to Principal
Year 1	$	290,000		$	37,556		$	14,500		$	23,056
Year 2		266,944			37,556			13,347			24,209
Year 3		242,735			37,556			12,137			25,419

Required a. Using a financial statements model like the one shown next, record the appropriate amounts for the following two events:

(1) January 1, Year 1, issue of the note payable.

(2) December 31, Year 1, payment on the note payable.

b. If the company earned $80,000 cash revenue and paid $54,000 in cash expenses in addition to the interest in Year 1, what is the amount of each of the following?

(1) Net income for Year 1.

(2) Cash flow from operating activities for Year 1.

(3) Cash flow from financing activities for Year 1.

c. What is the amount of interest expense on this loan for Year 4?

Using a financial statements model like the one shown next, record the appropriate amounts for the following two events: (1) January 1, Year 1, issue of the note payable. (2) December 31, Year 1, payment on the note payable. (In the Cash Flow column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity and NA to indicate the element is not affected by the event. Enter any decreases to account balances with a minus sign.) Show less Effect of Transactions on Financial Statements Balance Sheet Income Statement Cash Flow Event No. Assets LiabilitiesEquity Revenue ExpensesNet Income Required A Required B1

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