Rosedale Corp. obtained a $50,000 loan from Second Capital Bank on January 1, 2019. It purchased a piece of heavy equipment for $48,000 on the same day. The loan bears interest at 6% per year on the unpaid balance and is repayable in three annual blended payments of $18,705 on December 31 each year.
Required:
1. Prepare the journal entries to record the following transactions:
a. Receipt of loan proceeds from the bank
b. Purchase of the equipment.
2. Prepare the loan repayment schedule.
3. Prepare the journal entry to record the first loan payment. Provide descriptions for journal entries. General ledger account numbers are not necessary.