On January 1, Year 1, Luzak Company issued a $120,000, five-year, 6% installment note to McGee Bank. The note requires annual payments of $28,488, 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 $7,200 and principal of $21,288.
Year 4
Dec. 31.	Paid the annual payment on the note, included $3,134 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

Paid the annual payment on the note, which consisted of interest of $7,200 and principal of $21,288. For a compound transaction, if an amount box does not require an entry, leave it blank.

Year 1 Dec. 31

Paid the annual payment on the note, including $3,134 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

Check My Work