On January 1, MM Co. borrows $440,000 cash from a bank and in return signs an 8% installment note for five annual payments of $110,201 each.

1.Prepare the journal entry to record issuance of the note.

2.For the first $110,201 annual payment at December 31, what amount goes toward interest expense? What amount goes toward principal reduction of the note?

1.Prepare the journal entry to record issuance of the note.

2.For the first $110,201 annual payment at December 31, what amount goes toward interest expense? What amount goes toward principal reduction of the note? interest expense-

principal reduction-