Exercise 10-4A Financial statement effects of an installment note LO 10-1 A partial amortization schedule for a 10-year note payable issued on January 1, 2016, is shown below: Cash Payment $49,212 49,212 49,212 Principal Applied to Interest $ 19,000 17,489 15,903 Applied to Principa $ 30,212 31,723 33,309 Accounting PeriodBalance January 1 2016 2017 2018 380,000 349,788 318,065 Required a. Using a financial statements model like the one shown here, record the appropriate amounts for the following two events: (In the Cash Flow column, use the initials OA to designate operating activity IA for investing activity, FA for financing activity and NA to indicate the element is not affected by the event. Enter any decreases to account balances with a minus sign.) (1) January 1, 2016, issue of the note payable (2) December 31, 2016, payment on the note payable Answer is complete but not entirely correct. Effect of Transactions on Financial Statements Balance Sheet Income Statement Cash Flow Event Net Income Assets Liabilities Equity Revenue- 380,000 49,212) Expenses 0FA 19000(19,000(19,000 OA 30,212 X FA 380,000+ 2. (30,212) (19,000) b. If the company earned $98,000 cash revenue and paid $63,000 in cash expenses in addition to the interest in 2016, what is the amount of each of the following? (1) Net income for 2016 Answer is complete and correct. Revenue $ 98,000 Expenses Operating $63,000 expenses Interest expense 19,000 Total expenses 82,000 Net income $ 16,000