The following transactions apply to Pecan Company for Year 1, its first year of operations: Received $32,000 cash in exchange for issuance of common stock. Secured a $114,000 ten-year installment loan from State Bank. The interest rate is 5 percent and annual payments are $14,764. Purchased land for $28,000. Provided services for $85,000. Paid other operating expenses of $32,000. Paid the annual payment on the loan. Required Organize the transaction data in accounts under an accounting equation. Prepare an income statement and balance sheet for Year 1. What is the interest expense for Year 2? Year 3?

Required

1. Organize the transaction data in accounts under an accounting equation.
2. Prepare an income statement and balance sheet for Year 1.
3. What is the interest expense for Year 2? Year 3?