On July 10, 2010, Harris Co. sold a machine to Jackson. On July 15, 2010, Harris accepted a $35,000 non-interest-bearing note from Jackson that was...

On July 10, 2010, Harris Co. sold a machine to Jackson. On July 15, 2010, Harris accepted a $35,000 non-interest-bearing note from Jackson that was due July 10, 2013. Harris carried the machine on its books at a cost of $30,000 with a book value of $22,000. The fair value of the machine and the note was not known at the time of the sale; however, Harris' incremental borrowing rate was 10%.

Prepare the following journal entries on Harris's books and submit your response in the form of a Word document, Excel spreadsheet, or Quickbooks document:

• Record the sale of the truck.
• Provide the adjusting entries related to the note at December 31, 2010, December 31, 2011, and December 31, 2012.
• Provide the collection of the note on July 13, 2013.
• Prepare the notes portion of Harris's balance sheet as of December 31, 2010, 2011, and 2012.