On January 1, 2017, Riverbed Co. borrowed and received $508,000 from a major customer evidenced by a zero-interest-bearing note due in 3 years. As consideration for the zero-interest-bearing feature, Riverbed 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.
(b)		Prepare the journal entry to record any adjusting entries needed at December 31, 2017. Assume that the sales of Riverbeds product to this customer occur evenly over the 3-year period.

No. Date Account Titles and Explanation Debit Credit (a) January 1, 2017 (b) December 31,2017 To record Interest Expense) December 31,2017 To record Unearned Sales Revenue)