On January 1, MM Company borrows $290,000 cash from a bank and in return signs an 4% installment note for five annual payments of $65,142 each. 1. Prepare the journal entry to record issuance of the note. 2. For the first $65,142 annual payment at December 31, what amount goes toward interest expense? What amount goes toward principal reduction of the note?

On January 1, MM Company borrows $290,000 cash from a bank and in return signs an 4% installment note for five annual payments of $65,142 each. 1. Prepare the journal entry to record issuance of the note. 2. For the first $65,142 annual payment at December 31, what amount goes toward interest expense? What amount goes toward principal reduction of the note?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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