Big Country Corporation is in the business of selling cattle. Due to recent diseases plaguing cattle, Big Country is experiencing a cash shortage. Big Country issued a $280,000, six-year, zero-interest-bearing note to Little Town Corp. on January 1, 2023, and received $200,000 cash. In addition, to conserve cash, Big Country agreed to sell cattle to Little Town for an amount less than the regular selling price over the six-year period. The market interest rate for similar notes is 8%.

(a) Calculate the present value of the note on January 1 using (1) a financial calculator or (2) Excel function PV. Round to the nearest dollar. Big Country uses the effective interest method. 

(b) Prepare Big Country’s January 1 journal entry.