Question - Notes Receivable with Realistic Interest Rate: On October 1, 2017, Arden Farm Equipment Company sold a pecan-harvesting machine to Valco Brothers Farm, Inc. In Lieu of cash payment Valco Brothers Farm gave Arden a 2-year, $120,000, 8% note ( a realistic rate of interest for a note of this type). The note required interest to be paid annually on October 1. Arden's financial statements are prepared on a calendar-year basis.
Instructions: Assuming Valco Brothers Farm fulfills all the terms of the note; prepare the necessary journal entries for Arden Farm Equipment Company for the entire term of the note.