Question:

On October $1,2025,$ Disneyland receives a $$100,000,8\%,5-$year note from a customer. The market interest rate is $7\%.$ Interest is paid annually, and the company$$s year$-$end is December $31$st

$$ Task:

Prepare the journal entries for both the Effective Interest Method and the Straight$-$Line Method on the following dates:

October $1,2025$ When the note is received

December $31,2025$ To record $3$ months of interest earned

October $1,2026$ When annual interest is received

December $31,2026$ To accrue interest for the next $3$ months

$$ Please show step$-$by$-$step calculations for premium$/$discount amortization and interest income. Round all figures to the nearest dollar.