2 Exercise 10-3A Financial statement effects of an installment note LO 10-1 1.25 points Dan Dayle started a business by issuing an $80,000 face-value note to First State Bank on January 1, Year 1. The note had an 8 percent annual rate of interest and a five-year term. Payments of $20,037 are to be made each December 31 for five years. Required a. What portion of the December 31, Year 1, payment is applied to interest expense and principal? eBook Print Interest expense Principal b. What is the principal balance on January 1, Year 2? Principal balance c. What portion of the December 31, Year 2, payment is applied to interest expense and principal? (Round your answers to the nearest dollar amount.) Interest expense Principal