Principal Balance January 1 A partial amortization schedule for a four-year note payable that Coastal Co. issued on January 1, Year 1, is shown here: Required a. What rate of interest is Coastal Co. paying on the note? b. Using a financial statements model, record the appropriate amounts for the following two events: (1) January 1, Year 1, issue of the note payable. (2) December 31, Year 1, payment on the note payable. c. If the company earned $80,000 cash revenue and paid $45,000 in cash expenses in addition to the interest in Year 1, what is the amount of each of the following? (1) Net income for Year 1. (2) Cash flow from operating activities for Year 1. (3) Cash flow from financing activities for Year 1. d. What is the amount of interest expense on this loan for Year 3? Accounting Period Principal Balance January 1 Cash Payment December 31 Applied to Interest Applied to Principal Year 1 $200,000 $60,384 $16,000 $44,384 Year 2 155,616 60,384 12,449 $47,935 In this exercise, we will calculate the interest rate using the information from a partial amortization table. We will then record the transactions relating to the note payable in a financial statements model. We will also prepare the income statement and calculate the cash flows from operating and financing activities for Year 1.