On 1 January 20X9, a borrower signed a long-term note, face amount, $1,600,000; time to maturity, three years; stated rate of interest, 2%. 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 three years. Use the effective interest method.