Accounting for an installment note payable
The following transactions apply to Whitter Co. for 2012, its first year of operations.
1.Received $100,000 cash in exchange for issuance of common stock.
2.Secured a $200,000, 10-year installment loan from First Bank. The interest rate was 6 percent and annual payments are $27,174.
3.Purchased land for $60,000.
4.Provided services for $120,000 cash.
5.Paid other operating expenses of $85,000.
6.Paid the annual payment on the loan.
Required
a.Organize the transaction data in accounts under an accounting equation.
b. Prepare an income statement and balance sheet for 2012.
c. What is the interest expense for 2013? 2014?
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