McCormick Corporation issued a 4-year, ($40),000, 5% note to Greenbush Company on January 1, 2015, and received

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McCormick Corporation issued a 4-year, $$40$,000, 5% note to Greenbush Company on January 1, 2015, and received a computer that normally sells for $$31$,495. The note requires annual interest payments each December 31. The market rate of interest for a note of similar risk is 12%. Prepare McCormick’s journal entries for

(a) the January 1 issuance and

(b) the December 31 interest.

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