Brestovacki Corporation issued a $50,000, four-year, 5% note to Jernigan Corp. on January 1, 2011, and received a computer that normally sells for $38,912. The note requires annual interest payments each December 31. The market interest rate for a note of similar risk is 11%. Prepare Brestovacki’s journal entry for (a) The January 1, 2011 issuance and (b) The December 31, 2011 interest payment using the effective interest method.

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