Refer to M10-20. Welton Corp. established the note on the first day of its fiscal year and will fully repay the note by the end of year 3 on its December 31 fiscal year-end. Prepare Welton Corp.’s journal entries on 

(a) January 1, Year 1; 

(b) December 31, Year 1; 

(c) December 31, Year 2; and 

(d) December 31, Year 3. Round amounts in Years 1 and 2 to the nearest dollar. In Year 3, ensure the rounded amounts eliminate the Notes Payable balance and maintain the same annual cash repayment.

Data from M10-20:

Access an online loan calculator with annual payments, such as the one at mycalculators.com, to produce an amortization schedule for Welton Corp.’s installment note that has original principal of $25,000, interest of 6 percent compounded annually, and a term of 3 years.