Interest bearing note with unrealistic interest rate, interest is payable semi annually, one time collection of principal.

On January 1, 2018 Fiona Co. Sold an office equipment with a cost of 1,000,000 and accumulated depreciation of 150,000 in exchange for a 3 year, 10% 2,000,000 note receivables. Principal is due on dec 31, 2020 but interest is due annually every July 1 and Dec 31. The prevailing interest rate is 12%