10. Carr Castle Co, borrowed $40,000 by issuing a four-year non-interest-bearing note to a customer. In addition, Carr Castle agreed to sell inventory to the same customer at reduced prices over the four-year period. Carr Castle's incremental borrowing rate was 8%, so the present value of the note was $29,400. The customer agreed to purchase an equal amount of inventory each year over the four-year period. Required: Prepare journal entries to: a. Issue the note b. Adjust at the end of the first year c. Adjust at the end of the second year