The December 31, 2012 financial statements of Bavarian Sausage Works (BSYV) show $50,000 for “Note receivable.” You learn that die company provided $50,000 cash to a customer (a new chain of hotdog stands) in exchange for a promissory note. The note was issued on January' 1, 2011, hearing interest at 12% per year (which approximates the market interest rate), with principal and interest of $56,000 due on January 1, 2012. The hotdog chain has had numerous delays obtaining the required licenses to operate on street comers. Consequently, on January 1, 2012, the chain and BSW renegotiated the promissory note so that the $56,000 in principal and interest would come due on January 1,2014. Aside from the initial recording of the note receivable on January' 1, 2011, BSW has not recorded any other journal entries relating to this note.
Required:
Please provide the necessary' journal entries to correct BSW’s accounts in 2011 and 2012.