On October 1, 2010 Jeppo Farm Equipment Company sold a pecan-harvesting machine to Lujan Brothers Farm, Inc. In lieu of a cash payment Lujan Brothers Farm gave Jeppo a 2-year, $100,000, 8% note. The note required interest to be paid annually on October 1. Jeppo's financial statements are prepared on a calendar-year basis.
Instructions: Assume Lujan Brothers Farm fulfills all the terms of the note, prepare the necessary journal entries for Jeppo Farm Equipment Company for the entire term of the note.