Journalizing Installment Notes On the first day of the fiscal year, a company issues $58,000, 10%, six-year installment notes that have annual payments of $13,317. The first note payment consists of $5,800 of interest and $7,517 of principal repayment a. Journalize the entry to record the issuance of the installment notes. Cash 58,000 Notes Payable v 58,000 Feedback Check My Work 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 After the final payment, the carrying amount on the note is zero, indicating that the note has been paid in full b. Journalize the first annual note payment. For a compound transaction, if an amount box does not require an entry, leave it blank. Interest Receivable 5,800 13,317 Notes Payable 7,517 Interest Expense 13,317 Alternative Financing Plans Frey Co. is considering the following alternative financing plans: Plan 2 Plan 1 Issue 10% bonds (at face value) $920,000 $460,000 Issue preferred $1 stock, $10 par 760,000 Issue common stock, $5 par 920,000 620,000 Income tax is estimated at 40% of income. Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $276,000 Enter answers in dollars and cents, rounding to two decimal places. 1.2 X Earnings per share on common stock Plan 1 X Earnings per share on common stock 1.39 Plan 2 Feedback Check My Work take interest Set up a column for each plan. Remember tax and dividends