On January 1, 20Y2, Hebron Company issued a $19,000, 4-year, 11% installment note to Ventsam Bank. The note requires annual payments of $6,124, 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 $2,090 and principal of $4,034.
20Y5
Dec. 31	Paid the annual payment on the note, included interest of $607. The remainder of the payment reduced the principal balance on the note.

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

20Y2 Jan. 1	Accounts PayableBonds PayableCashInterest ExpenseInterest PayableNotes PayableCash	Cash	Cash
	Accounts PayableBonds PayableCashInterest ExpenseInterest PayableNotes PayableNotes Payable	Notes Payable	Notes Payable

Since the note is issued at face value, there is no discount to record.

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Paid the annual payment on the note, which consisted of interest of $2,090 and principal of $4,034. If an amount box does not require an entry, leave it blank.

20Y2 Dec. 31	Accounts PayableBonds PayableCashInterest ExpenseInterest PayableInterest ReceivableInterest Expense	Interest Expense	Interest Expense
	Accounts PayableBonds PayableCashInterest PayableNotes PayableNotes ReceivableNotes Payable	Notes Payable	Notes Payable
	Accounts PayableBonds PayableCashInterest ExpenseInterest PayableNotes PayableCash	Cash	Cash

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.

Paid the annual payment on the note, included interest of $607. The remainder of the payment reduced the principal balance on the note. If an amount box does not require an entry, leave it blank.

20Y5 Dec. 31	Accounts PayableBonds PayableCashInterest ExpenseInterest PayableInterest ReceivableInterest Expense	Interest Expense	Interest Expense
	Accounts PayableBonds PayableCashInterest PayableNotes PayableNotes ReceivableNotes Payable	Notes Payable	Notes Payable
	Accounts PayableBonds PayableCashInterest ExpenseInterest PayableNotes PayableCash	Cash	Cash