Problem:
On January 1, 2013, a company borrowed $50,000 cash by signing a 7% installment note that is to be repaid with five annual end-of year payments, the first of which is due on December 31,2013.
Required:
Question 1: Prepare the company's gernal journal entry to record the note's issuance.
Question 2: Assume that the annual payments are to consist of accrued interest plus equal amounts of principal. Prepare the general journal entries to record the first and second installment payments.
Note: Please show the work not just the answer.