The following are selected 2020 transactions of Darby Corporation. Sept. 1 Purchased inventory from Orion Ltd. on account for $50,000. Darby uses a periodic inventory system. 

Oct. 1 Issued a $50,000, 12-month, 8% note to Orion in payment of Darby's account. 

1 Borrowed $75,000 from the bank by signing a 12-month, non–interest-bearing $81,000 note. 

Instructions 

a. Prepare journal entries for the selected transactions above. 

b. Prepare adjusting entries at December 31, 2020. 

c. Calculate the net liability, in total, to be reported on the December 31, 2020 SFP for (1) the interest-bearing note, and (2) the non–interest-bearing note.