You will need to use the information from QS10-12 for instalment notes and provide: 1. The amount that goes toward interest expense for year 2 (show your work) 2. The Amount that goes toward the reduction in principle for year 2 ( show your work ) 3. That amount that goes toward interest expense for year 3 ( show your work ) 4. The amount that goes toward the reduction in principle for year 3 ( show your work ) 5. The payment entry for year 26. The payment entry for year 2

QS10-12 p. 404 On January 1, MM Co. borrows $340,000 cash from a bank and in return signs an 8% installment note for five annual payments of $85,155 each. 1. Prepare the journal entry to record issuance of the note. 1/1 DR Cash 340,000 CR Notes Payable 340,000 2. For the first $85,155 annual payment at December 31, what amount goes toward interest expense? What amount goes toward principal reduction of the note? Interest: 340,000 x 0.08 27200 Principal Reduction Payment 85155 - Interest -27200