On January 1, Year 1, Brown Co. borrowed cash from First Bank by issuing a $105,000 face-value, four-year term note that had an 6 percent annual interest rate. The note is to be repaid by making annual cash payments of $30,302 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $57,000 cash per year.

b. Prepare an income statement, balance sheet, and statement of cash flows for each of the four years. (Hint: Record the transactions for each year in T-accounts before preparing the financial statements.) (Round your answers to the nearest dollar amount. Statement of Cash Flows only: Items to be deducted must be indicated with a minus sign.) Cash Land Year 1 Year 1 End. Bal End. Bal Year 2 End. Bal Year 3 End. Bal. Year 4 End. Bal Notes Payable Retained Earnings Year 1 Year 1 End. Bal. Year 2 End. Bal Year 2 End. Bal End. Bal. Year 3 Year 3 End. Bal. Year 4 End. Bal. Year 4 End. Bal. End. Bal. Rent Revenue Interest Expense Year 1 Year 1 End. Bal. Year 2 End. Bal. Year 2 End. Bal. Year 3 End. Bal. Year 3 End. Bal. Year 4 End. Bal. Year 4 End. Bal. End. Bal. BROWN CO. Income Statements For the Year Ended December 31 Year 1 Year 2 Year 3 Year 4 BROWN CO. Balance Sheets As of December 31 Year 1 Year 2 Year 3 Year 4 Assets Total assets Liabilities Stockholders' equity Total liabilities and stockholders' equity BROWN CO. Statements of Cash Flows For the Year Ended December 31 Year 1 Year 2 Year 3 Year 4 Cash flows from operating activities: Net cash flow from operating activities: Cash flow from investing activities: Net cash flow from investing activities Cash flow from financing activities: Net cash flow from financing activities Net change in cash Ending cash balance