On December 6, 2020, the Eldora Company purchased a piece of equipment for $80,000 with a down payment of $10,000. The balance owed was financed with a three-year loan that requires quarterly payments of $6,281.48 starting on March 6, 2021. The annual interest rate is 4.63%. The company’s year-end is on December 31. Record journal entries to the penny and display financial statement amounts to the penny. The loan is based on a 30-day month and 360-day year.

Use the following website to access an amortization schedule:

http://www.amortization-schedule.info/calculator

Instructions: Based on the amortization schedule, complete the following items:

5.Prepare all of the required journal entries for 2021, assuming that adjusting journal entries are recorded only at the end of the year.

6.Determine the total interest expense for 2021.

7.Show how the note payable should be classified on the Balance Sheet at December 31, 2021.

8.Prepare the reversing journal entry on January 1, 2022.

9.Prepare all of the required journal entries for 2022, assuming that adjusting journal entries are recorded only at the end of the year.