On January 2, 2014, the Casual Elite Co. acquired land by issuing a 6%, three-year note for $200,000. The note will be paid in three annual payments of $74,822 each December 31. The payment schedule follows:

Required
1. Prepare the entry to:
a. Issue the note on January 2, 2014.
b. Record the annual payment on December 31, 2014.
2. Show how the note will appear on the December 31, 2014, balancesheet.

Transcribed Image Text:

Annual Payment Principal Portion of Payment Interest Portion of Payment Principal Balance at Year-End Year 2014 2015 2016 74,822 74,822 74,822 $62,822 66,591 70,587 $12,000 8,231 4,235 $137,178 70,587 0-