On August 31, 2021, New Age Designs Inc. sold merchandise to Classic Motifs Co., accepting a 5%, 3-year promissory note of $428,800 in exchange.

Interest is payable annually on August 31, starting August 31, 2022.

New Age Designs normally pays 6% interest to borrow funds. However, Classic Motifs normally pays 7% to borrow funds.

The product sold is carried on New Age Designs' books at a cost of $219,900.

New Age Designs has a year end of August 31 and uses IFRS

Required:

1. Calculate the amount at which the product was sold to Classic Motifs Co. (2 marks)
2. Prepare an amortization schedule for this note. (2 marks)
3. Prepare the journal entries required to record this transaction in the books of New Age Designs on August 31, 2021. (1.5 marks)
4. Prepare the journal entry required for this note by New Age Designs in 2022. (1.5 marks)