Journalizing installment notes
On the first day of the fiscal year, a company issues $100,000, 8%, six-year installment notes that have annual payments of $21,632. The first note payment consists of $8,000 of interest and $13,632 of principal repayment.
a. Journalize the entry to record the issuance of the installment notes.
b. Journalize the first annual note payment.