Exercise 10-4B Financial statement effects of an installment note A partial amortization schedule for a five-year note payable that Mercury Co. issued on January I. Year 1 , is shown next: Required a. What rate of interest is Mercury Co. paying on the note? b. Using a financial statements model like the one shown next, record the appropriate amounts for the following two events (1) January 1, Year 1 , issue of the note payable (2) December 31, Year 2, payment on the note payable c. If the company earned $75,000 cash revenue and paid $32,000 in cash expenses in addition to the interest in Year 1 , what is the amount of each of the following? (1) Net income for Year 1 (2) Cash flow from operating activities for Year 1 (3) Cash flow from financing activities for Year 1 d. What is the amount of interest expense on this loan for Year 3 ? EXERCISE 10-4B a. The interest rate is % b. c. (1) \begin{tabular}{|l|l|} \hline Revenue & \\ \hline Expenses & \\ \hline \multicolumn{1}{|c|}{ Operating Expenses } & \\ \hline Interest Expense & \\ \hline Total Expenses & \\ \hline Net Income & $40,000 \\ \hline \end{tabular} (2) (3) Cash Flows From Financing Activities: Proceeds from Issue of Note Repayment of Note Net Cash Flow from Financing Activities $49,142 d. The amount of interest expense for Year 3 is $ Show computations here