On January $1,$ Year $1,$ Luzak Company issued a $$22,000,4-$year, $12\%$ installment note to McGee Bank. The note requires annual payments of $$7,243,$ beginning on December $31,$ Year $1.$

Journalize the entries to record the following:

Year $1$

Jan. $1$ Issued the note for cash at its face amount.

Dec. $31$ Paid the annual payment on the note, which consisted of interest of $$2,640$ and principal of $$4,603.$

Year $4$

Dec. $31$ Paid the annual payment on the note, including $$776$ of interest. The remainder of the payment reduced the principal balance on the note.

Issued the note for cash at its face amount.

Year $1,$ Jan. $1$

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Paid the annual payment on the note, which consisted of interest of $$2,640$ and principal of $$4,603.$ For a compound transaction, if an amount box does not require an entry, leave it blank.

Year $1,$ Dec. $31$

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Paid the annual payment on the note, including $$776$ of interest. The remainder of the payment reduced the principal balance on the note. For a compound transaction, if an amount box does not require an entry, leave it blank.

Year $4,$ Dec. $31$

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