7. On January 1, 2020, Red Corporation sold merchandise to Brown Inc. and received a non-interest-bearing note that requires Brown to pay $375,000 on December 31, 2021 (the notes maturity date). The current annual market rate of interest on notes of similar risk is 9%. Brown paid Red $375,000 on December 31, 2021. REQUIRED: Answer questions 1-3 related to the Red Corp. If no entry is needed, write, no entry.

(1) Prepare the entries necessary on January 1, 2020 to record the sale. Show your computation.

(2) Prepare the entries necessary on December 31, 2020. Show your computation.

(3) Prepare the entries necessary on December 31, 2021. Show your computation.