I'm having trouble with journal entries on long term notes receivable that are collected in installments.  I'm fine with bond amortization schedules and notes receivable where the principal is due all at once at the end, but I'm not understanding the receivables where the principal is received a little each year.  For example,

A $128,855, 3-year, 8% note was received on January 1 of year 1 when the market rate of interest was 11%; the note is to be repaid in 3 equal installments of $50,000 on December 31 of year 1, year 2, and year 3

It's similar to the bond amortization schedules. 

Think about it this way.  There are three payments of $50,000, so $150,000, but the note is only $128,855.  The remaining $21,145 is interest.

The interest expense is determined in the same manner it is for bond amortization schedules.  For example, year one interest would be $128,855*8%.  The remaining amount of the payment, representing the principal, would reduce the note receivable. 

Hope this helps. 

Is the 11% market rate of interest involved anywhere?