On the first day of the fiscal year, a company issues $63,000, 12%, five-year installment notes that have annual payments of $17,477. The first note payment consists of $7,560 of interest and $9,917 of principal repayment. a. Journalize the entry to record the issuance of the installment notes. If an amount box does not require an entry, leave it blank.

Cash
Cash
63,000
Cash

Notes Payable
Notes Payable
Notes Payable
63,000
Feedback
The cash payment is the same in each year. The interest and principal repayment, however, change each year. This is because the carrying amount (book value) of the note decreases each year as principal is repaid, which decreases the interest.

b. Journalize the first annual note payment. If an amount box does not require an entry, leave it blank.

Interest Expense
Interest Expense
Interest Expense
9,917

Notes Payable
Notes Payable
7,560
Notes Payable

Cash
Cash
Cash
17,477