On March 1,2016,Vantage Services issued a 8% long-term notes payable for $22,000.It is payable over a 16-year term in $1,375 principal installments on March 1 of each year,beginning March 1,2017.Each yearly installment will include both principal repayment of $1,375 and interest payment for the preceding one-year period.The journal entry to pay the first installment will include a debit to Interest Expense for $1,760.

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This is because the yearly installment includes both principal repayment and interest payment for the preceding one-year period. Therefore, when the first installment is paid on March 1, 2017, it will include a payment of $1,375 towards the principal and $1,760 towards the interest expense for the preceding one-year period.

On March 1,2016,Vantage Services Issued a 8% Long-Term Notes Payable