On October 1, 20X4, Farmer Engineering Services purchased a new laser surveying instrument. Farmer paid $5,000 down and executed the following promissory note:

Promissory note For value received, the undersigned promises to pay to the order of Laser Equipment Company the sum of: *****Twenty-Thousand and no/100 Dollars***** ($20,000.00) Along with annual interest of 10% on the unpaid balance. This note shall mature and be payable, along with accrued interest, on September 30, 20X5.

October 1, 20X4 (Issue Date) J.D. Farmer Farmer Engineering (Maker signature)

(a) Prepare the appropriate journal entry to record the purchase on October 1, 20X4.

(b) Prepare the appropriate journal entry to record the year-end interest accrual on December 31, 20X4.