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Question - Received $100,000 cash in exchange for issuance of common stock.Purchased land for $100,000.
1. Secured a $300,000 five-year installment loan from State Bank. The interest rate is 5 percent and annual payments are $69,292.
2. Provided services for $260,000.
3. Paid other operating expenses of $150,000.
4. Paid the annual payment on the loan.
Required -
1. Organize the transaction data in accounts under an accounting equation.
2. Prepare an income statement and balance sheet for Year 1.
3. What is the interest expense for Year 2? Year 3?
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