On October 1, 2016, Justine Company purchased equipment from Napa Inc. in exchange for a noninterest-bearing note payable in five equal annual payments of $500,000, beginning Oct 1, 2017. Similar borrowings have carried an 11% interest rate. The equipment would be recorded at:

All methods and formulas used must be in complience with GAAP standards, please no excel or calculator tricks and show how you got your numbers and the awnser, please.