On January 1, 2017, Bramble Co. borrowed and received $471,000 from a major customer evidenced by a zero-interest-bearing note due in 5 years. As consideration for the zero-interest-bearing feature, Bramble agrees to supply the customers inventory needs for the loan period at lower than the market price. The appropriate rate at which to impute interest is 8%.

(a) Prepare the journal entry to record the initial transaction on January 1, 2017.

This journal entry should have four slots taken up, NOT two.

(b) Prepare the journal entry to record any adjusting entries needed at December 31, 2017. Assume that the sales of Brambles product to this customer occur evenly over the 5-year period.

This should have one entry to record interest expense (two slots) and one entry to record unearned sales revenue (two slots).