On January 1, Year 1, Brown Company 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. Rent revenue is collected in cash at the end of each year. (Hint: Record the transactions for each year in T-accounts before preparing the financial statements.)

BROWN COMPANY
Income Statements
For the Year Ended December 31
	Year 1	Year 2	Year 3	Year 4

BROWN COMPANY
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 COMPANY
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 flows from investing activities:
Net cash flow from investing activities
Cash flows from financing activities:
Net cash flow from financing activities
Net change in cash
Ending cash balance