On January 1, 2020,WildhorseCompany makes the two following acquisitions.

1.Purchases land having a fair value of $290,000by issuing a5-year, zero-interest-bearing promissory note in the face amount of $488,667.2.Purchases equipment by issuing a6%,8-year promissory note having a maturity value of $330,000(interest payable annually).

The company has to pay11% interest for funds from its bank.

(a)Record the two journal entries that should be recorded byWildhorseCompany for the two purchases on January 1, 2020.

(b)Record the interest at the end of the first year on both notes using the effective-interest method.