Entry of Notes Payable in Installments

On the first of January 2022, Empresas Buenapaga took out a loan of $100,000 in cash by signing an installment note payable that requires four annual payments that include payment to the principal and interest at 7% payable every December 31, 2022 to 2025.

Required:

1. Compute the amount of the annual loan payment assuming that the applicable present value of annuity factor is 3.3872

2. Make the journal entry to recognize the loan taken on the first of January 2022.

3. Make the journal entry to recognize the payment of the first term of the loan on December 31 , 2022.