Selkirk Company obtained a $16,500 note receivable from a customer on January 1, 2016. The note, along with interest at 10%, is due on July 1, 2016. On February 28, 2016, Selkirk discounted the note at Unionville Bank. The banks discount rate is 12%.

Required:

Prepare the journal entries required on February 28, 2016, to accrue interest and to record the discounting for Selkirk. Assume that the discounting is accounted for as a sale