On October 1, 2020, Sage Equipment Company sold apecan-harvesting machine to Valco Brothers Farm, Inc. In lieu of acash payment Valco Brothers Farm gave Arden a 2-year, $135,200, 8%note (a realistic rate of interest for a note of this type). Thenote required interest to be paid annually on October 1. Sage’sfinancial statements are prepared on a calendar-year basis.Assuming Valco Brothers Farm fulfills all the terms of the note,prepare the necessary journal entries for Sage Equipment Companyfor the entire term of the note. Assume that reversing entries arenot made on January 1, 2021 and January 1, 2022
