Answer: Please find answer in explanation column
Step-by-step explanation:
a) Journal to record Issued installment note for cash on the first day of the fiscal year.
Date Account Debit Credit
Jan 1 Cash $85,000
Notes Payable $85,000
b) Journal to record the first annual payment on the note.
Date Account Debit Credit
Dec 31 Interest Expense $5,950
Notes Payable $9,822.
Cash $15,772