On January 1, 20Y2, Hebron Company issued a $12,000, 4-year, 9% installment note to Ventsam Bank. The note requires annual payments of $3,704, beginning on December 31, 20Y2.

Journalize the entries to record the following:

20Y2

Jan. 1 Issued the note for cash at its face amount.

Dec. 31 Paid the annual payment on the note, which consisted of interest of $1,080 and principal of $2,624.

20Y5

Dec. 31 Paid the annual payment on the note, including interest of $306 of interest. The remainder of the payment reduced the principal balance on the note.

Question Content Area

Issued the note for cash at its face amount. If an amount box does not require an entry, leave it blank.

Paid the annual payment on the note, which consisted of interest of $1,080 and principal of $2,624. If an amount box does not require an entry, leave it blank.

Paid the annual payment on the note, including interest of $306 of interest. The remainder of the payment reduced the principal balance on the note. If an amount box does not require an entry, leave it blank.