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On January $1.$ MM Company borrows $$320,000$ cash from a bank and in return signs an $8\%$ installment note for five annual payments of $$80,146$ each.

Prepare the journal entry to record issuance of the note.

For the first $$80,146$ annual payment at December $31,$ what amount goes toward interest expense? What amount goes toward principal reduction of the note?

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Required $1$

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Prepare the journal entry to record issuance of the note.

Journal entry worksheet

$1$

Record the issuance of the note.

Note: Enter debits before credits.