14-08 14-2Journalizing Installment Notes

On the first day of the fiscal year, a company issues $39,000, 10%, four-year installment notes that have annual payments of $12,303. The first note payment consists of $3,900 of interest and $8,403 of principal repayment.

a. Journalize the entry to record the issuance of the installment notes.

b. Journalize the first annual note payment. For a compound transaction, if an amount box does not require an entry, leave it blank.