Chapter 21, Problem 21.12E

Installment note; statement of cash flow effects

• LO21–3, LO21–6

National Food Services, Inc., borrowed $4 million from its local bank on January 1, 2018, and issued a 4-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 10%. Installment payments are $1,261,881 annually.

Required:

What would be the amount(s) related to the note that National would report in its statement of cash flows for the year ended December 31, 2018?