On January 1, Year 1, Brown Company borrowed cash from First Bank by issuing a $111,000 face-value, four-year term note that had an 8 percent annual interest rate. The note is to be repaid by making annual cash payments of $33,513 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 $63,000 cash per year.