please explain

Sept. Purchased inventory from Encino Company on account for $111,250. Blue records purchases 1 gross and uses a periodic inventory system. Oct. 1 Issued a $111,250,12-month, 7% note to Encino in payment of account. This means Blue turned the A/P balance into a Note Payable. Nov. 1 Borrowed $100,000 from the Shore Bank by signing a 12-month, zero-interest-bearing $118,000 note. a. Prepare the necessary journal entries: b. Prepare adjusting entries at December 31 . Record the interest on the zero-interest-bearing note evenly over the 12 month term. c. Compute the total net liability (principal and interest) to be reported on the December 31 balance sheet for: (1) The interest-bearing note (2) The zero-interest-bearing