On December 31, 2010, Green Company finished consultation services and accepted

in exchange a promissory note with a face value of $400,000, a due date of December

31, 2012, and a stated rate of 5%, with interest receivable at the end of each year. The

fair value of the services is not readily determinable and the note is not readily

marketable. Under the circumstances, the note is considered to have an appropriate

imputed rate of interest of 10%.

The following interest factors are provided:

Interest Rate

Table Factors For Three Periods 5% 10%

Future Value of 1 1.15763 1.33100

Present Value of 1 .86384 .75132

Future Value of Ordinary Annuity of 1 3.15250 3.31000

Present Value of Ordinary Annuity of 1 2.72325 2.48685

Instrurctions:

a.) Determine the present value of the note.

b.)prepare a Schedule of Note Discount Amortization for Green Company under the effective interest method.(Round to whole dollars)