On January 20X9, a borrower signed a long-term note, face amount, $800,000; time to maturity, four years;

Question:

On January 20X9, a borrower signed a long-term note, face amount, $800,000; time to maturity, four years; started; stated rate of interest, 4%, The effective rate of interest of 6% determined the cash received by the borrower. The principal of the note will be paid at maturity; stated interest is due at the end of each year.
Required:
1. Compute the cash received by the borrower.
2. Give the required entries for the borrower for each of the four years. Use the effective-interest method.