Cambria Limited took a $250,000 two-year note receviable from a customer in connection with a major inventory sale transaction on 1 January 20X5. The note required annual end-of-year interest payments of 4%, and the principal was due at the end of 20X6.

Requirement 1: Assume now that the market interest rate is 8%, Calculate the present value of the note, and prepare a schedule that shows the annual interest. (Round time value factor to 5 decimal places and final answers to the nearest whole dollar amount. Enter all answers in positive.)

Present Value = __________

Opening Net Liability/Receivable = ___________

Interest Paid/Received = __________

Discount Amortization = ___________

Closing Net Liability/Receivable = _____________

Prepare journal entries to record the initial sale transaction and each payment on the books of Cambria, consistent with requirement 1. Use the gross method to record the note.