2. On January 1, 20X1, the company received a $10,000 three-year note bearing interest at 10% annually for sales. The annual interest is received at each December 31. The market interest rate is 12% annually. March 31 is the companys reporting date. The company used the effective interest method to account for this long-term note receivable.

Cash Received Interest Income Discount Amortized Carrying Amount

Jan 1, 20x1 9,520

Dec 31, 20x1 1,000 1,142 142 9,662

Dec 31, 20x2 1,000 1,159 159 9,821

Dec 31, 20x3 1,000 1,179 179 10,000

Required (11 marks) Note: Dont need to show calculation:

Prepare journal entries on January 1, 20X1, March 31, 20X2, and December 31, 20X2 (Note: round to the nearest dollar).

How much is this note measured on March 31, 20X2? (Note: round to the nearest dollar).