2. Prepare the necessary journal entries to record the above transactions.

Bradson Merchandising, which has a December 31 year end, and uses a periodic inventory system, completed the following transactions during 2026 and 2027:

2026 Oct. 1 Sold merchandise to Bravo Links, terms n/60, $4,000. Oct. 3 Negotiated with Bravo Links to exchange the account receivable for a 120-day, 10% note for $4,000. Dec. 31 Accrued interest on the Bravo Links note.

2027 Feb. 1 Collected in full from Bravo Links