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What amount goes toward principal reduction of the note

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Question - On January 1, MM Co. borrows $440,000 cash from a bank and in return signs an 8% installment note for five annual payments of $110,201 each.

Required -

1. Prepare the journal entry to record issuance of the note.

2. For the first $110,201 annual payment at December 31, what amount goes toward interest expense? What amount goes toward principal reduction of the note?

Reference no: EM132869087

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