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Little Company borrowed $40,000 from Sockets on January 1, 2021, and signed a three-year, 6% installment note to be paid in three equal payments at the end of each year. The present value of an ordinary annuity of $1 for 3 periods at 6% is 2.67301. Required: 1. Prepare the journal entry on January 1, 2021, for Sockets lending the funds. 2. Calculate the amount of one installment payment. 3. Prepare an amortization schedule for the three-year term of the installment note. 4. Prepare the journal entry for Sockets first installment payment received on December 31, 2021. 5. Prepare the journal entry for Sockets third installment payment received on December 31, 2023.

Prepare the journal entry for Sockets third installment payment received on December 31, 2023. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

1. Record the entry for Sockets' lending the funds on January 1, 2021

2. Calculate the amount of one installment payment

3.

4. Record the entry for the first installment payment received on December 31, 2021

5. Record the entry for the third installment payment received on December 31, 2023

Required 1 Required 2 Required 3 Required 4 Required 5 Prepare an amortization schedule for the three-year term of the installment note. (Leave no cell blank, enter zero where ever required. Round your answers to the nearest whole dollar amount.) Year Cash Payments Effective Interest Increase in Balance Outstanding Balance 2021 2022 2023 0 0 0

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