Flint Corporation is in the business of selling cattle. Due to recent diseases plaguing cattle, Flint is experiencing a cash shortage. Flint issued a $319,200, 6-year, zero-interest-bearing note to Little Town Corp. on January 1, 2020, and received $228,000 cash. In addition, to conserve cash, Flint agreed to sell cattle to Little Town for an amount less than the regular selling price over the 6-year period. The market interest rate for similar notes is 8%. Flint uses the effective interest method.

(a) Calculate the present value of the note on January 1 using (1) a financial calculator or (2) Excel function PV.

Present value of the note

$

(b) Prepare Flints January 1 journal entry.

Date	Account Titles and Explanation	Debit	Credit
Jan. 1, 2020