On January 1, 2020, GlassCase Inc. sold services worth $700,000 to their customer Lead Co. and accepted a note as payment in full. The promissory note is a 6-year $700,000, 4% note. Interest on the note is payable annually on December 31. GlassCase is able to borrow currently at 9%, but Lead Co. has only been able to borrow at 11%.

The following interest factors may be of use in this problem (all for 6 periods):

@4% @9% @11%

Future value of $1 1.26532 1.67710 1.87041

Present value of $1 0.79031 0.59627 0.53464

Future value of an ordinary annuity 6.63298 7.52334 7.91286

Present value of an ordinary annuity 5.24214 4.48592 4.23054

Required: (a) Provide the journal entry to record GlassCases sale of services in exchange for the promissory note on 1/1/20. SHOW ALL YOUR CALCULATIONS.

(b) Record the journal entry to record the interest received and revenue recorded at 12/31/20 by GlassCase. SHOW ALL YOUR CALCULATIONS.