Required information Problem 10-26A (Algo) Effect of an installment note on financial statements LO 10-1 [The following information applies to the questions displayed below.] On January 1, Year 1, Brown Company borrowed cash from First Bank by issuing a $106,000 face-value, four-year term note that had an 7 percent annual interest rate. The note is to be repaid by making annual cash payments of $31,294 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $58,000 cash per year. Problem 10-26A (Algo) Part b b. Prepare an income statement, balance sheet, and statement of cash flows for each of the four years. Rent revenue is collected in cash at the end of each year. (Hint: Record the transactions for each year in T-accounts before preparing the financial statements.)