On October 31, 2014, Harris Company arranged to purchase a $250,000 piece of equipment bymaking a 20-percent down payment and signing a 15-year installment loan for the balance. Theloan carries a 7 percent interest rate and is to be repaid in monthly payments starting November30, 2014. Harris prepares its financial statements on a calendar-year basis.

Required: Prepare the journal entries for 2014 and determine the amounts to be shown on the2014 financial statements. Discuss, but do not calculate, the process of determining the splitbetween current and long-term notes payable.