Truman Company manufactures and sells agricultural machinery. On January 1, 2018, Truman sold some machinery to Jefferson Corp. Truman Company accepts a note receivable with a face value of $100,000 from Jefferson Corp. The note has no explicit interest and will be due in 4 years on December 31, 2021. The market borrowing rate is 10% for companies as creditworthy as Jefferson Corp. Truman has a December 31 fiscal year end. Assume the machinery was delivered and accepted by Jefferson Corp on January 1, 2018.

a. Prepare the journal entry Truman Company should record on January 1, 2018.

b. What is the carrying value of the note receivable December 31, 2019?