Dan Dayle started a business by issuing an $88,000 face value note to First State Bank on January 1, 2016.

Dan Dayle started a business by issuing an $88,000 face value note to First State Bank on January 1, 2016. The note had an 6 percent annual rate of interest and a five-year term. Payments of $20,891 are to be made each December 31 for five years.

Required
a.    What portion of the December 31, 2016, payment is applied to interest expense and principal?

Explanation:

Dayle COMPANY Amortization Schedule $88,000, 5-Yr. Term Note, 6% Interest Rate
Year	Prin. Bal. on Jan. 1			Cash Pay. Dec. 31			Applied to Interest			Applied to Principal			Prin. Bal. End of Period
2016		$ 88,000			$ 20,891			$ 5,280			$ 15,611			$ 72,389
2017		72,389			20,891			4,343			16,548			55,841
2018		55,841			20,891			3,350			17,541			38,300
2019		38,300			20,891			2,298			18,593			19,707
2020		19,707			20,891			1,184			19,707			0

Thank you!