M CorD. makes a loan to N Co. and receives in exchange a three-year, $15,000 note bearing interest at 10 percent annually.

The market rate of interest for a note of similar risk IS 12 percent.

Additional information:

PV of Interest for 12% is 2.40183

PV of Principal for 12% is 0.71178

Note: Provide working notes

Requred:

Pass

journal entries that M Corp would record on the receipt of the note and the receipt of interest revenue

on the note at present value?