On January 1, 2016, Billips Corporation purchased equipment having a fair value of $72,054.94 by issuing a $90,000 note, payable in three $30,000 annual installments beginning December 31, 2016.

Required:

Prepare (1) the journal entry to record the purchase of the equipment, (2) a schedule to compute the annual interest expense, and (3) the journal entries to record yearly interest expense and note repayments over the life of the note.