Grocery Corporation sold $520,000, 7 percent notes on January 1 of this year at a market rate of 8 percent. The notes were dated also on January 1 with interest to be paid each December 31; they mature in 10 years. Use effective-interest amortization and a discount account. Use effective-interest amortization.

Required:

Show how the interest expense, interest payment, and notes payable should be reported on the financial statements for this year. (Round time value factor to 4 decimal places. Round intermediate and final answers to the nearest whole dollar.)

GROCERY CORPORATION Financial Statements For year ended December 31 Statement of earnings: Statement of financial position: Long-term liabilities: Statement of cash flows