On July 1, 2020, Stealth Company sold a machine (classified as inventory) that had a list price of $115,200. The customer paid $19,200 cash and signed a three-year, $96,000 note that specified a stated interest rate of 3%. Annual interest on the full amount of the principal is payable each June 30. The principal is payable on June 30, 2023. The market rate of interest for a note of this risk is 5%.

Required a. Compute the present value of this note. $0 b. Prepare an effective interest schedule for this note. Stated Market Discount Note Date Interest Interest Amortization Carrying Value Jul 1, 2020 $ Jun 30, 2021 $ 0$ 0 $ 0 Jun 30, 2022 0 0 0 Jun 30, 2023 0 0 0 c. Prepare all entries required by Stealth for this note through its maturity date, including year-end adjustments. Date Account Name Dr. Cr. Jul 1, 2020 Note Receivable 0 0 Cash 18,000 0 0 0 Sales Revenue 0 0 Jun. 30, 2021 Cash 0 0 Note Receivable Interest Revenue Jun 30, 2022 Cash Note Receivable Interest Revenue Jun 30, 2023 Cash Note Receivable 0 0 Interest Revenue To record interest on note Jun 30, 2023 Cash OO Note Receivable 0 To record settlement of note Show transcribed image text