$497,000, 10% 3-year mortgage note on Jan 1. The note will be paid in three annual installments of $200,000, each payable at the end of the year. What is the amount of interest expense that should be recognized in the second year?
first year's interest would be $49,700, so $150,300 in principal would be paid off.
second year interest would be ($497,000 -$150,300) x 10% or $34,670
check my math