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On October 1, 2008, Jeppo Farm Equipment Company sold a pecan-harvesting machine to Lujan Brothers Farm, Inc. In lieu of a cash payment Lujan Brothers Farm gave Jeppo a 2-year, $100,000, 8% note (a realistic rate of interest for a note of this type). The note required interest to be paid annually on October 1. Jeppo's financial statements are prepared on a calendar-year basis.
Instructions
Assuming Lujan Brothers Farm fulfills all the terms of the note, prepare the necessary journal entries for Jeppo Farm Equipment Company for the entire term of the note.
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