On January 1, 2020, Shamrock Inc. bought land that had an assessed value of $390,000 at the time of purchase. A $560,000, noninterest-bearing note due on January 1, 2023, was given in exchange. There was no established exchange price for the land, and no ready market value for the note. The interest rate that is normally charged on a note of this type is 15%.

Cost of land to be recorded		$
Interest expense to be recorded

On January 1, 2020, Flounder Furniture Ltd. borrowed $3 million (face value) from Aurora Inc., a major customer, through noninterest-bearing note due in 5 years. Because the note was noninterest-bearing, Flounder Furniture agreed to sell furniture to this customer at lower than market price. A 11% rate of interest is normally charged on this type of loan.

Note to be recorded on January 1, 2020