Beta purchased a piece of equipment at a cost of $25,000. To finance the purchase, he signed a five-year promissory note, which requires five equal annual payments. Beta will make the first payment within a year. Each payment will be in the amount of $6,935.

a. Determine the interest rate on this note. round.

b. Prepare the Beta wage entries for the first payment and for the last payment.

c. Suppose that immediately after making the second payment, Beta refinances and signs a new three-year note for the amount owed on the first note and the interest rate is 9.25%, what will be the annual payment on the new note?