On December 31, 2014, Green Company finished consultation services and accepted in exchange a promissory note with a face value of $600,000, a due date of December 31, 2017, and a stated rate of 3%, 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 4%.

(a) Determine the present value of the note (A little help: this is an EXCEL assingment, Please use EXCEL PV Function FORMULAS so I can have a better understanding how to set all the formulas on excel. Thanks)

Step 1. Calculate the "Cash Received" by Face Rate*Face Value

Step 2. Discount "Cash Received" as an annuity with the Market Rate

Step 3. Dicsount the principal as a single sum with the Market Rate

Step 4. Present Value of the Note = Step 2 + Step 3

(b) Prepare a Schedule of Note Discount/Premium Amortization for Green Company under the effective interest method (Same in Excel)

	Cash Received	Interest Revenue	Amortization	Carrying Balance
12/31/2014
12/31/2015
12/31/2016
12/31/2017

(c) Prepare necessary journal entries from Green Company on 12/31/2014, 2015, 2016, and 2017