In December 2021, Jordan Inc and Otter-Manufacturing signed a 3-year contract for Jordon to update Otter’s computer networks starting in 2022. The contract calls for annual payments of $20,000 due on January 1 of each year, with the first payment due on 1/1/22. The implicit rate of interest used by Jordon in pricing this contract was 8%.

Is a journal entry required for 2021? If so, how would it be done?