Cool Globe Inc. entered into two transactions, as follows:

1. Purchased equipment paying $19400 at the date of purchase and signing a noninterest-bearing note requiring the balance to be paid in four annual installments of $19400 on the anniversary date of the contract. Based on Cool Globe's 10% borrowing rate for such transactions, the implicit interest cost is $16,105.

2. Purchased a tract of land in exchange for $11,600 cash that was paid immediately and signed a noninterest-bearing note requiring four $11600 annual payments. The first annual payment is due in one year. The fair value of the land is $42400.

Required: Prepare journal entries for these transactions.