Savoy Inc. sold a building and the land on which it is located on January 1 of Year 1 and received a $225,000 noninterest-bearing note receivable that matures December 31 of Year 3. The $225,000 is to be paid in full on the maturity date. It has been determined that 12% is a realistic interest rate for this note. The sale was recorded as follows by Savoy. The annual reporting period ends December 31, and the accounts have not been adjusted or closed for Year 1.

Date	Account	Dr.	Cr.
Jan. 1, Year 1	Note Receivable	225,000
	Accumulated Depreciation, Building	150,000
	Building		225,000
	Land		90,000
	Gain on Sale of Assets		60,000

Required
a. Compute the present value of this note on January 1 of Year 1.
b. Prepare journal entries required as of the following dates.
1. January 1, Year 1, correcting entry
2. December 31, Year 1
3. December 31, Year 2
4. December 31, Year 3