Required information

[The following information applies to the questions displayed below.] On January 1, Year 1, Brown Co. borrowed cash from First Bank by issuing a $118,000 face-value, four-year term note that had an 7 percent annual interest rate. The note is to be repaid by making annual cash payments of $34,837 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $70,000 cash per year.

Required a. Prepare an amortization schedule for the four-year period. (Round your answers to the nearest dollar amount.)

BROWN CO.
Amortization Schedule
$118,000, 4-Yr. Term Note, 7% Interest Rate
Year	Prin. Bal. on Jan. 1	Cash Pay. Dec. 31	Applied to Interest	Applied to Principal	Prin. Bal. End of Period
Year 1
Year 2
Year 3
Year 4

b. Prepare an income statement, balance sheet, and statement of cash flows for each of the four years. (Hint: Record the transactions for each year in T-accounts before preparing the financial statements.) (Round your answers to the nearest dollar amount. Statement of Cash Flows only: Items to be deducted must be indicated with a minus sign.)

BROWN CO.
Income Statements
For the Year Ended December 31
	Year 1	Year 2	Year 3	Year 4
Rent revenue
Interest expense
Net Income	$0	$0	$0	$0

BROWN CO.
Balance Sheets
As of December 31
	Year 1	Year 2	Year 3	Year 4
Assets
Cash
Land
Total assets	$0	$0	$0	$0
Liabilities
Notes payable
Stockholders equity
Retained earnings
Total liabilities and stockholders equity	$0	$0	$0	$0

BROWN CO.
Statements of Cash Flows
For the Year Ended December 31
	Year 1	Year 2	Year 3	Year 4
Cash flows from operating activities:
Receipts from rental
Paid for interest
Net cash flow from operating activities:	0	0	0	0
Cash flow from investing activities:
Paid to purchase land
Net cash flow from investing activities	0	0	0	0
Cash flow from financing activities:
Proceeds from loan
Repayment of loan
Net cash flow from financing activities	0	0	0	0
Net change in cash
Plus: Beginning cash balance
Ending cash balance	$0	$0	$0	$0