Decided to purchase equipment on January 2, 2020. Issues a $898,000, 4-year , non-interest-bearing note for new equipment when the prevailing market interest rate for obligations of this nature was 11%. The company will pay off the note in 4 installments of $224,5000 due at the end of each year of the note's life.

Prepare Journal entries at the end of the year to record payment of principal and interest assuming use of effective interest method

Dec 31, 2020 Interest expense

Cash

Jan 2, 2021 Notes Payable

Interest expense

Cash

Show work plz