Cheyenne Corp. was experiencing cash flow problems and wasunable to pay its $113,000 account payable to Culver Corp. when itfell due on September 30, 2020. Culver agreed to substitute aone-year note for the open account. The following two options werepresented to Cheyenne by Culver Corp.:

Option 1:		A one-year note for $113,000 due September 30, 2021. Interestat a rate of 8% would be payable at maturity.
Option 2:		A one-year non–interest-bearing note for $122,040. The impliedrate of interest is 8%.

Assume that Culver Corp. has a December 31 year end.

A. Assuming Cheyenne Corp. chooses Option 1, prepare the entriesrequired on Culver Corp.’s books on September 30, 2020, December31, 2020, and September 30, 2021. (Credit accounttitles are automatically indented when the amount is entered. Donot indent manually. If no entry is required, select "No Entry" forthe account titles and enter 0 for the amounts. Round answers to 0decimal places, e.g. 5,275. Record journal entries in the orderpresented in the problem.)

B. Assuming Cheyenne Corp. chooses Option 2,prepare the entries required on Culver Corp.’s books on September30, 2020, December 31, 2020, and September 30, 2021.(Credit account titles are automatically indented whenthe amount is entered. Do not indent manually. If no entry isrequired, select "No Entry" for the account titles and enter 0 forthe amounts. Round answers to 0 decimal places, e.g. 5,275. Recordjournal entries in the order presented in theproblem.)

A list of possible accounts is as follows:

Accounts Payable Accounts Receivable Accrued Liabilities Accumulated Depreciation - Equipment Advances to Employees Advertising Expense Allowance for Doubtful Accounts Allowance for Sales Returns and Allowances Bad Debt Expense Bank Charges Expense Cash Cash Over and Short Due from Factor Entertainment Expense Equipment Finance Expense Finance Revenue Freight in Freight out Gain on Disposal of Equipment Gain on Disposal of Land Interest Expense Interest Income Interest Receivable Inventory Land Loss on Disposal of Equipment Loss on Disposal of Land Loss on Disposal of Receivables Loss on Impairment Miscellaneous Expense No Entry Notes Payable Notes Receivable Office Expense Petty Cash Postage Expense Prepaid Expenses Purchase Discounts Recourse Liability Refund Liability Rent Expense Sales Discounts Sales Discounts Forfeited Sales Returns and Allowances Sales Revenue Servicing Liability Service Revenue Supplies Supplies Expense Unearned Revenue