On January 1, 2012, Averill Company issued a $120,000, 8-year, 10% installment note from Deacon Bank. The

Question:

On January 1, 2012, Averill Company issued a $120,000, 8-year, 10% installment note from Deacon Bank. The note requires annual payments of $22,493, beginning on December 31, 2012. Journalize the entries to record the following:
2012
Jan. 1. Issued the notes for cash at their face amount.
Dec. 31. Paid the annual payment on the note, which consisted of interest of $12,000 and principal of $10,493.
2017
Dec. 31. Paid the annual payment on the note, which consisted of interest of $5,594 and principal of $16,899.