On January 1, 2016, Hebron Company issued a $175,000, five-year, 8% installment note to Ventsam Bank. The note requires annual payments of $43,830, beginning on December 31, 2016.
Journalize the entries to record the following transactions. Be sure to include the year in the date for the entries. Refer to the Chart of Accounts for exact wording of account titles.
2016 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 $14,000 and principal of $29,830.
2019 Dec. 31 Paid the annual payment on the note, which included $6,253 of interest. The remainder of the payment reduced the principal balance on the note.