The following transactions apply to Pecan Co. for Year 1, its first year of operations:

1. Received $100,000 cash in exchange for issuance of common stock.

2. Secured a $300,000 five-year installment loan from State Bank. The interest rate is 5 percent and annual payments are $69,292.

3. Purchased land for $100,000

4. Provided services for $260,000.

5. Paid other operating expenses of $150,000.

6. Paid the annual payment on the loan. Round answers to nearest whole dollar.

Required

a. Organize the transaction data in accounts under an accounting equation.

b. Prepare an income statement and balance sheet for Year 1.

c. What is the interest expense for Year 2? Year 3?