A partial amortization schedule for a note payable with interest paid annually that was issued on January 1, Year 1, is shown next: Accounting Period Year 1 Principal balance January 1 Cash Payment $ 412,000 $ 53,000 Applied to Interest $ 16,480 Applied to Principal $ 36,520 Required: a. What is the annual rate of interest charged on this loan? b. Using the horizontal financial statements model, record the appropriate amounts for the following two events: (1) January 1, Year 1, issue of the note payable. (2) December 31, Year 1, payment on the note payable.

a. What is the annual rate of interest charged on this loan? b. Using the horizontal financial statements model, record the appropriate amounts for the following two events: (1) January 1, Year 1, issue of the note payable. (2) December 31 , Year 1 , payment on the note payable