Use the balance sheet equation to analyze the effects of the following transactions involving noncurrent liabilities. Set up separate columns as necessary for each liability. Use a separate column for cash.

1. A firm signed a long-term note for $5 million for three years at an interest rate of 8% and received $5 million in cash.

2. The first interest payment was paid at the end of the first year.

3. The interest payment at the end of the second year was due, but wasn’t paid.

4. The note was paid at the end of the third year, including the accrued interest from year 2. Show the effects of each interest payment and the repayment separately. Assume that interest on any unpaid balances compounds; in other words, interest accrues on the unpaid interest carried over from year 2.