11) On January 1, year 1, Luzak Company issued a $120,000, five year 6%, installment note to McGee Bank. The note requires annual payments of $28,488, beginning on December 31, Year 1. Journalize the entries to record the following.

Year 1

January 1^st. issued the note for cash at its face amount

Dec. 31. Paid the annual payment on the note, which consisted of interest of $7,200 and principal of $21,288

Year 4

Dec. 31. Paid the annual payment on the note, including $3,134 of interest. The remainder of the payment reduced the principal balance on the note.