I need give me example in every step. Do not use Excel. Thank you.

On January 1,2018, Vidalia Company accepted a 14 % note, dated January 1, 2018 with a face amount of $ 2,480,000 in exchange for cash. The note is due in 10 years. For notes of similar risk and maturity, the market interest rate is 16 %Interest is paid each December 31.

Requirement a. Determine the present value of the note at January 1,2018. (Use the present value and future value tables, a financial calculator, or a spreadsheet for your calculations. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, X.XXXXX. Round intermediary currency computations and your final answers to the nearest whole dollar.)

Solution:

The present value of the note receivable is $ (.............)

Requirement b. Prepare the journal entry at the issuance of the note. Before recording journal entry, first calculate the discount on notes receivable using the below formula.

Notes receivable		Notes receivable		Discount on
(face value)	-	(present value)	=	notes receivable

Solution:

Now, record the journal entry for issuance of the note. In this journal entry, we will increase notes receivable account and decrease cash and discount on notes receivable accounts. (Record debits first, then credits. Exclude explanations from any journal entries.)

Requirement c. Prepare the journal entry to record the interest revenue for the first 2 years.

The discount represents deferred interest revenue to be earned over the life of the note. Companies amortize the discount to interest

revenue over the loan term using the effective interest method. There are two primary effects of the discount amortization.

1.	Increases the interest revenue so that the corporation's effective rate of return is brought up to the higher market rate.
2.	Reduces the discount and increases the carrying value of the note receivable until the carrying value is brought up to its face value at the maturity date.

-To determine the interest revenue each period, we construct an amortization table using the effective interest rate method. The amortization table will show us the effective interest for each period, the discount amortization (the difference between the effective interest for the period and the interest received), and the amortized cost (the prior amortized cost balance plus the current discount amortization). Use the table headings as a guide to walk you through the calculations. The opening amortized cost balance and the annual interest revenue amounts that you have previously calculated have been entered for you. Go ahead and complete the amortization table for the first year. (Round all amounts you enter into the amortization table to the nearest whole dollar and enter all amounts as positive numbers.)

Solution:

Use the amortized cost balance you calculated at the end of the first year to determine the effective interest, discount amortization, and updated amortized cost for the second year. (Round all amounts you enter into the amortization table to the nearest whole dollar and enter all amounts as positive numbers.)

Solution:

-Begin by preparing the journal entry to record interest income for the first year.

-Now, prepare the journal entry to record the interest revenue for December 31, 2019. Review the December 31,2019