On january 1 2010, Yeargan company obtained an 88,000, seven year 5% installment note from Farmers Bank. The note requires annual payment of $15,208,with the first payment occuring on the last day of the fiscal year. The first payment consists of $4,400 interest and principal repayment of $10,808.
(1) Journalize the following entries(If required, round all amounts to the nearest whole dollar.)
(a) Issue the installment notes for cash on January 1 2010.
_____________ $__________
_____________ $__________
(b) Paid the first annual payment on the note
________ $ _________
________ $ _________
______ $_________
(2) determine the amount of the bond interst expense for the first year.