Redlands, Inc. agreed to purchase equipment on January 1, 2014. The equipment cost $20,000 on that date, but Redlands lacked cash to buy it. Instead, the company agreed to make four equal payments on each December 31, beginning on December 31, 2014. The interest rate on January 1, 2014 was 8%. The present value of an annuity factor for 8% and four periods is 3.31213.

Required:

Compute Redlands annual cash payment.

Complete the following note payable amortization table through December 31, 2017.

Year	Present Value-1/1	Cash Payment	Interest Expense	Principal Reduction	Present Value12/31
2014	$20,000
2015
2016
2017