1010-4 PROBLEM 10.4B preparation and Use of an Amortization Table pays 16 percent interest instead of the 10 percent rate changeu On October 1, 2018, Jenco signed a four-year. $100.000 note payable to Vicksburg State Bank in conjunction with the purchase of equipment. The note calls for interest at an annual rate of 12 per- cent (1 percent per month). The note is fully amortizing over a period of 48 months. The bank sent Jenco an amortization table showine the allocation of monthly payments between interest and principal over the life of the loan. A small part of this amortization table is illustrated as follows. (For convenience, amounts have been rounded to the nearest dollar.) AMORTIZATION TABLE (12%, 4-YEAR NOTE PAYABLE FOR $100,000; PAYABLE IN 48 MONTHLY INSTALLMENTS OF $2,633) Interest Period Payment Date Monthly Payment interest Expense Principal Reduction Unpaid Balance Issue date Oct 1, 2018 Nov. 1 Dec. 1 $2,633 2.633 $1,000 984 $1,633 1,649 $100,000 98,367 96,718 Instructions a. Explain whether the amounts of interest expense and the reductions in the unpaid principal are likely to change in any predictable pattern from month to month. b. Prepare journal entries to record the first two monthly payments on this note. Chapter 10 Liabilities c. Complete this amortization table for two more monthly installments, d. Will any amounts relating to this four-year note be classified as current liabilities in denen December 31. 2018, balance sheet? Explain, but you need not compute any additional del amounts