McCormick Corporation issued a 4-year, \($40\),000, 5% note to Greenbush Company on January 1, 2015, and received a computer that normally sells for \($31\),495. The note requires annual interest payments each December 31. The market rate of interest for a note of similar risk is 12%. Prepare McCormick’s journal entries for

(a) the January 1 issuance and

(b) the December 31 interest.