On January 1, Yeargan Company obtained a $125,000, seven-year 5% installment note from Farmers Bank. The note requires annual payments of $21,602, with the first payment occurring on the last day of the fiscal year. The first payment consists of $6,250 interest and principal repayment of $15,352.Journalize the following entries:
(a)Issued the installment notes for cash on January 1.
(b)Paid the first annual payment on the note.

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The Answer of On January 1, Yeargan Company obtained a $125,000, seven-year 5% installment note from Farmers Bank. The note requires annual payments of $21,602, with the first payment occurring on the last day of the fiscal year. The first payment consists of $6,250 interest and principal repayment of $15,352.Journalize the following entries:
(a)Issued the installment notes for cash on January 1.
(b)Paid the first annual payment on the note.

On January 1, Yeargan Company Obtained a $125,000, Seven-Year 5