[mbueno123]

The note payable to Royce Computers (transactions 04 and 07) is a five-year note, with interest at the rate of 12 percent annually. Interest expense should be computed based on a 360 day year.

Transaction 04: June 2: Check # 5002 was used to make a down payment of $30,000.00 on additional computer equipment that was purchased from Royce Computers, invoice number 76542. The full price of the computer was $150,000.00. A five-year note was executed by Byte for the balance.

Transaction 07: June 10: Check # 5003 was used to make a $23,000.00 payment reducing the prinicpal owed on the June 2 purchase of computer equipment from Royce Computers.

I know how to set up the journal entry I just have no idea how to solve it

[paraclete]

You have to do calculations of interest due based on the outstanding balance.

Obviously there are three transactions, a down payment, an asset and a loan followed by a further reduction of the loan balance. There will also be a calculation of interest due, so let's see your effort