Recording a Note Payable Issued for Non-Cash Consideration

On January 1, 2020, Jet Air Inc. contracted with Systems Plus Inc. to manufacture heavy equipment. Jet Air Inc. issued a $90,000 note to Systems Plus Inc. in exchange for the equipment that required 5% interest payments annually over 3 years on December 31 of each year. Although the fair value of the customized heavy equipment was not reasonably determinable, it was determined that 10% was a reasonable rate of interest for such a transaction.

Provide journal entries to be made by Jet Air Inc. at each of the following dates.

a. January 1, 2020 ---Date of note issuance.

b. December 31, 2020 ---Date of interest payment.

c. December 31, 2021 ---Date of interest payment.

d. December 31, 2022 ---Date of interest payment.

e. December 31, 2022 ---Date of note payment at maturity.

• Note: List multiple debits or credits (when applicable) in alphabetical order.
• Note: Round your answer to the nearest whole dollar.
• Note: Adjust interest expense in 2022 for any net rounding differences.

Date Account Name Dr. Cr. a. Jan. 1, 2020 0 O 0 0 O 0 0 b. Dec. 31, 2020 . 0 0 0 0 0 C. Dec. 31, 2021 0 0 0 . 0 0 0 d. Dec. 31, 2022 0 0 0 0 0 e. Dec. 31, 2022 0 o 0 0 Please answer all parts of the