On January 1, the first day of the fiscal year, Shiller Company borrowed $53,000 by giving a seven-year, 11% installment note to Soros Bank. The note requires annual payments of $11,247, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $5,830 and principal repayment of $5,417.

Required:

a.

Journalize the entries to record the following transactions. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

1.	Issued the installment note for cash on the first day of the fiscal year.
2.	Paid the first annual payment on the note.

b.

Explain how the notes payable would be reported on the balance sheet at the end of the first year.