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On January 1, Year 1, Brown Co. borrowed cash from First Bank by issuing a $66,000 face value, four-year term note that had an 6 percent annual interest rate. The note is to be repaid by making annual cash payments of $19,047 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $31,680 cash per year.

2. Organize the information in accounts under an accounting equation. (Round your answers to the nearest whole dollar amount. Enter any decreases to account balances with a minus sign. If there is no effect on the Account Titles for Retained Earnings, leave the cell blank. Not all cells will require entry.)

Required information (The following information applies to the questions displayed below.) On January 1, Year 1, Brown Co. borrowed cash from First Bank by Issuing a $66,000 face value, four-year term note that had an 6 percent annual interest rate. The note is to be repaid by making annual cash payments of $19,047 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $31,680 cash per year. b. Organize the information in accounts under an accounting equation (Round your answers to the nearest whole dollar amount. Enter any decreases to account balances with a minus sign. If there is no effect on the Account Titles for Retained Earnings, leave the cell blank. Not all cells will require entry.) BROWN CO. Effect of Events on the Accounting Equation Year 1. Year 2, Year 3 and Year 4 Assets Stockholders' Liabilities + Equity Land Notes Retained Payable Earnings Event Account Titles for Retained Earnings Cash Year 1 1/1 1/1 12/31 12/31 Bal. Year 2 Beg, bal 12/31 12/31 0 0 End, bal Year 3 Beg. bal 12/31 12/31 End, bal. 0 0 Year 4 Bog, bal 12/31 12/31 End, bal 01 + 0 0

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