Problem 3 (12 pts)

Riverside Corporation purchased equipment from Brainard Co., on January 1, 2021. In payment for $150,000 equipment, Riverside Corporation issued a 6-year note to be paid in six equal payments at the end of each year. The payments include interest at the rate of 8%.

Required:

1. Calculate the amount of each installment.
2. Prepare the journal entry for purchase of equipment.
3. Prepare the journal entries for the first two installment payments on December 31, 2021 and 2022.