By December 31^st 2019, Agincourt Inc. had rendered a considerable amount of consulting services to Lee Company for the 2019 fiscal year. Services were rendered in exchange for a five-year promissory note with a maturity value (face value) of $500,000; (the promissory note also pays interest at a rate of 3% per annum and that interest is payable annually commencing on December 31^st 2020). Assume for purposes of this problem that Lee Company has a poor credit rating that requires them to have to borrow money at 9% (per annum). Assume the services rendered to Lee by Agincourt were consulting services - just normal revenue to Agincourt Inc.

Instructions

1. Using the PV tables attached, calculate the present value of the note (and hence the "value" of the services rendered by Agincourt Inc. for 2019) (show all calculations) (4 marks)
2. Complete the following Schedule of Note Discount Amortization (10 marks)

1. Prepare the journal entry to record the initial transaction on the books of Agincourt Inc. at December 31^st 2019. (Assume that the effective interest method is used and round amounts to the nearest dollar.) (3 marks)

1. Prepare all appropriate Journal entries for 2020 on the books of Agincourt Inc. (4 marks)
2. Prepare all appropriate Journal entries for 2021 on the books of Agincourt Inc. (4 marks)