On January 1, 2017, Metlock Inc. borrowed and received $400,000 from a major customer, Bridgeport Corp. The debt is evidenced by a zero-interest-bearing note due in 4 years. Metlock, as consideration for the zero-interest-bearing feature of the note, agrees that it will supply inventory to Bridgeport for the loan period at a below-market price. The appropriate rate at which to impute interest is 7%.

(a)

Prepare the journal entry to record the initial transaction on January 1, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount