On January 2, 2020, the Casual Elite Co. acquired land to build a distribution centre by issuing a 6%, three-year note for $200,000. The note will be paid in three annual payments of $74,822 each December 31. The payment schedule follows:

Required

1. Prepare the entry to:

a. Issue the note on January 2, 2020.

b. Record the annual payment on December 31, 2020.

2. Show how the note will appear on the December 31, 2020, balance sheet.

Transcribed Image Text:

Principal Portion of Principal Balance at Year-End Interest Portion of Annual Year Payment Payment Payment $137,178 70,587 $74,822 74,822 74,822 $62,822 66,591 70,587 $12,000 8,231 4,235 2020 2021 2022 -0-