On the first day of the fiscal year, Johnson Company obtained a $60,000, eight year, 5% installment note from City Bank. The note requires annual payments of $9,283 with the first payment occuring on the last day of the fiscal year. The first payment consists of interest of $3000 and principal repayment of $6,283.

1) Journalize the entries to record the following.

a) Issued the installment notes for cash on the first day of the fiscal year.

b) paid the first annual payment on the note.

2) Determine the amount of interest expense for the first year.