On June 1, Year 1, you to buy the new model T-3000 Racecar. The car costs $50,000. You apply a down payment of $2,000. You must finance the remaining portion by borrowing $48,000 using an installment note with a 10% annual interest rate. Payments of $1,217.40 are due each month over the next four years (48 months), beginning July 1, Year 1. Examine the graphs below and answer the following questions.

4. Suppose the purchase of the car on June 1, Year 1, was made by a company. How would the company record the purchase of the car by issuing the $48,000 installment note and paying cash of $2,000. (Hint: To record the car, assume the company uses the Equipment account).

5. Record the first installment payment by the company on July 1, Year 1 (callout amounts in the graph are given)

6. Record the second installment payment by the company on August 1, Year 1. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your answers to 2 decimal places.)

Car Payments Over 48 Months Loan Balance Over 48 Months 817.40 $1,400 824.21 $60,000 $1,200 $50,000 $1,000 $40,000 $800 $30,000 $600 $20,000 $400 $10,000 $200 SO 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 SO 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 400.00 393.19 Portion A of Total Payment (bottom) Portion B of Total Payment (top)