Journalizing installment notes

On the first day of the fiscal year, a company issues $$45,000,8\%,$ six$-$year installment notes that have annual payments of $$9,734.$ The first note payment consists of $$3,600$ of interest and $$6,134$ of principal repayment.

a$.$ Journalize the entry to record the issuance of the installment notes. If an amount box does not require an entry, leave it blank.

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The cash payment is the same in each year. The interest and principal repayment, however, change each year. This is because the carrying amount $($book value$)$ of the note decreases each year as principal is repaid, which decreases the interest.

b$.$ Journalize the first annual note payment. If an amount box does not require an entry, leave it blank.

Interest Expense $$

Notes Payable $$

Cash $$

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