Entries for issuing installment note transactions
On January 1, 2012, Averill Company issued a $120,000, 8-year, 10% installment note from Deacon Bank. The note requires annual payments of $22,493, beginning on December 31, 2012. Journalize the entries to record the following:
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2012
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Jan. 1.
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Issued the notes for cash at their face amount.
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Dec. 31.
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Paid the annual payment on the note, which consisted of interest of $12,000 and principal of $10,493.
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2017
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Dec. 31.
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Paid the annual payment on the note, which consisted of interest of $5,594 and principal of $16,899.
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