Dharma, a public company, sold a piece of equipment at the beginning of Year 1, receiving a $30,000, two-year 1% note. Interest is paid at the end of each year. Market interest rates are assumed to be 10%. (PV of $1, PVA of $1, and PVAD of $1.)

Required: 1. Calculate the present value of the note receivable.

2. Prepare entries for the sale, interest revenue, and cash collection each year for two years.