Answer:
Since there is not enough room here, I prepared an amortization schedule on an excel spreadsheet. The amortization schedule starts on year 1 (red color) and ends on year 5.
I also assumed a $23,500 initial loan (principal) and a 10% annual rate. I did this just to show how much principal is reduced every month and how much interest is paid. Your liability (loan's principal) decreases month by month.
If you are a bank, instead of interest expense, you would consider this an interest payment, and as the principal decreases, your asset (loan) decreases.
