Company A is a company engaged in buying and selling manufacturing equipment. On January 1, 2020, Company A sold equipment, with a cash price of 1,500,000. The cost of the equipment is 750,000. The buyer signed a deferred payment contract that provides for a down payment of 300,000 and a 5-year note for 1,705,900. The note is to be paid in 5 equal annual payments of 341,180. The payments include interest and are made on December 31 of each year, beginning on December 31, 2020.

Company A made the following entries in relation to the sale of the equipment and the related note receivable:

January 1, 2020

DR Cash 300,000 DR Notes receivable 1,705,900 DR Cost of goods sold 750,000

CR Sales 2,005,900 CR Inventory 750,000

December 31, 2020

DR Cash 341,180

CR Notes receivable 341,180

December 31, 2021

DR Cash 341,180

CR Notes receivable 341,180

Company A reported the notes receivable in its statement of financial position at December 31, 2020 and 2021 as part of trade and other receivables.

Based on the above and the result of your audit, answer the following

1. The interest rate on the note is?

2. Profit for 2020 is overstated by?

3. Retained earnings as of December 31, 2021 is overstated by?

4. The working capital as of December 31, 2021 is overstated by?