On the first day of the fiscal year, Nash Company borrowed $50,000 by giving a six-year, 5% instalment note to Buffet Bank. The note requires annual payments of $9,851, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $2,500 and principal repayment of $7,351.
Journalize the entries to record the following:
1. Issued the instalment note for cash on the first day of the fiscal year.
2. Paid the first annual payment on the note. For a compound transaction, if an amount box does not require an entry, leave it blank.