Larry Byrd Corporation issued a 4-year, $50,000, 5% note to Magic Johnson Company on January 1, 2008, and received a computer that normally sells for $39,369. The note requires annual interest payments each December 31. The market rate of interest for a note of similar risk is 12%. Prepare Larry Byrd’s journal entries for

(a) the January 1 issuance and

(b) the December 31 interest.