Grocery Corporation sold $600,000, 5 percent notes on January 1 of this year at a market rate of 6 percent. The notes were dated also on January 1 with interest to be paid each December 31; they mature in 3 years. Use effective-interest amortization and a discount account. Use effective-interest amortization.

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: $ 0 Statement of cash flows