Entries for Installment Note Transactions On January 1, Year 1, Luzak Company issued a $69,000, 4-year, 9% installment note to McGee Bank. The note requires annual payments of $21,298, beginning on December 31, Year 1. Journalize the entries to record the following: Year 1 Jan. 1 Issued the note for cash at its face amount. Dec. 31 Paid the annual payment on the note, which consisted of interest of $6,210 and Year 4 principal of $15,088. Dec. 31 Paid the annual payment on the note, including $1,759 of interest. The remainder of the payment reduced the principal balance on the note. Issued the note for cash at its face amount. Year 1, Jan. 1 Cash Notes Payable