On December 31, 2017, Innovations Company rendered services in exchange for a 3-year, 5%, promissory note with a face value of $800,000 with interest received annually. The client has credit ratings that require him to borrow money at 10% interest.

Instructions:

(a) What is the present value of the note.

(b)prepare a Schedule of Note Discount Amortization(Amortization table) for Innovations Company under the effective interest method.