Brestovacki Corporation issued a $50,000, five-year, 5% note to Jernigan Corp. on January 1, 2017 and received

Question:

Brestovacki issued a $50,000, five-year, 5% note to Jernigan Corp. on January 1, 2017 and received a piece of equipment that normally sells for $38,912. The note requires annual interest payments each December 31. The market interest rate for a note of similar risk is 11%.
(a) Prepare Brestovacki's journal entry for the January 1, 2017 issuance.
(b) Prepare the entry for the December 31, 2017 interest payment using the effective interest method.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...