Background for the question: ABC Auditor has agreed to perform an inventory count for XYZ on 12/31/Y1, but will allow them to pay over time. They are considering several different note options below. XYZs normal borrowing rate is 6%. The pvoaf ( present value factor of an ordinary annuity) for .5% is provided below. For all other factors use the PV tables in your book, do not round factors.

Period	Interest
36	32.8710
48	42.5803
60	51.7256

1. ABC will require XYZ to pay a down payment of $10,000 at 12/31/Y1 and the remainder in the form of a $30,000 note, at 8% interest, due $12/31/Y6. Interest will be due semi-annually.

a) What is Service Revenue at 12/31/Y1?

b) What is Interest Revenue at 12/31/Y3?