On january 1 , year 1 abc company borrowed 70,000 cash by signing a 9% installment note that is to be repaid with 4 annual year end payments of 21,607, the first of which is due on december 31, year 1.
a) Prepare the companys journal entry to record the notes issuance
b) Prepare the journal entries to record the 1st and 2nd installment payments hint: you will need to calculate interest expense and reduction to note payable for each 12 month period using the effective interest method.