Problem: May 1, 2025: Purchased equipment costing $96,000 by issuing an eight-year, 6% note payable. The note requires annual principal payments of $12,000 plus interest each May 1. Date Accounts and Explanation Debit Credit May 1, 2025 Equipment 96,000 Notes Payable 96,000 Purchased equipment by issuing an 8-year, 6% note. Dec 31, 2025: Accrued interest on the note payable. Date Accounts and Explanation Debit Credit Dec. 31, 2025 Interest Expense Interest Payable Recognized accrued interest.