On January 1, 2020, Nash Furniture borrowed $6,200,000 (face value) from Sinise Co., a major customer, through a zero-interest-bearing note due in 4 years. Because the note was zero-interest-bearing, Nash Furniture agreed to sell furniture to this customer at lower than market price. A 8% rate of interest is normally charged on this type of loan.

1. Prepare the journal entry to record this transaction.
2. Determine the amount of interest expense to report for 2020.