On January 1, 2008, Border Company purchased a truck. The company signed a note agreeing to pay $300,000 on December 31, 2012 (i.e. single large payment). The market interest rate on January 1, 2008 for this note was 11%. The market interest rates at the end of 2008, 2009, 2010, 2011, and 2012 for this note were 9%, 10%, 9%, 11%, and 12%, respectively.

1. Prepare the journal entry to record the purchase of the truck.

2. Prepare the journal entry on December 31, 2012