A company decides to obtain a small$-$business loan of $$275,000.$ The financial institution from which the company borrows offers two options:

a$.$ Borrow $$275,000$ at $6\%$ with monthly payments of $$5,316\mathrm{.}52$ over $5$ years.

b$.$ Borrow $$275,000$ at $7\%$ with monthly payments of $$3,192\mathrm{.}98$ over $10$ years.

Required:

Record the issuance of an installment note payable under each option.

Record the payments for the first and second month under each option.

Determine the total amount of interest paid under each option over the full period of the note.

Complete this question by entering your answers in the tabs below.

Record the issuance of an installment note payable under each option. $($If no entry is required for a particular transaction$/$event$,$ select $"$No Journal Entry Required" in the first account field. Round your answers to $2$ decimal places.$)$

Journal entry worksheet

$1$

$2$

Record the issuance of a note for $$275,000$ at $6\%$ with monthly payments of $$5,316\mathrm{.}52$ over $5$ years.

Note: Enter debits before credits.

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