On January 1, 2022, Priolo Builders Company borrowed $650,000 by issuing 4%, 5-year notes. The full amount of the cash was received immediately. Under the terms of the loan agreement, Priolo must make principal and interest payments every 6 months, beginning June 30, 2022. The note matures on December 31, 2026. The company’s fiscal year ends on December 31.

Required

a. Prepare the journal entry to record the issuance of the note payable.

b. Determine the annual payment required under the loan agreement.

c. Prepare an amortization table.

d. Prepare the journal entry to record payments for the first year.

e. What is the amount of the note payable on the balance sheet at December 31, 2024, after the semiannual payment? What is the interest expense for the year?

f. Prepare the journal entry to record the final payment at maturity.