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On January 1 of 20Y2, Hebron Company issued a $32,000, 4-year, 11% installment note to...

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Accounting

On January 1 of 20Y2, Hebron Company issued a $32,000, 4-year, 11% installment note to Ventsam Bank. The note requires annual payments of $10,314, beginning on December 31 of 20Y2.

Journalize the entries to record the following.

20Y2
Jan. 1 Issued the note for cash at its face amount.
Dec. 31 Paid the annual payment on the note, which consisted of interest of $3,520 and principal of $6,794.
20Y5
Dec. 31 Paid the annual payment on the note, which included interest of $1,022. The remainder of the payment reduced the principal balance on the note.

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