On October 1, 2011, Sussex Bank loaned $2,800 to Sharrie Zhang to buy a computer. She was expecting to have $3,000 at the end of January 2012 when a guaranteed investment certificate she owned reached maturity. Sharrie signed a four-month note with interest at 8%. All interest is to be paid at the end ol January when the note is due. Sussex Bank's year end is December 31.
Required:
a. Calculate how much interest has been earned by Sussex Bank by the end of December and by the time the note is due.
b. Prepare the journal entries that Sussex Bank would make at the end of December and when the note is collected in full.