On October 1, 2016, Valentino Company borrowed $15,600 from U.S. Best Bank by issuing a 12-month note. The bank discounted the note at 9%.

1. Prepare the journal entry needed to record the issuance of the note.

2. Prepare the journal entry needed at December 31, 2016, to accrue interest. Use months in calculation.

3. Prepare the journal entry to record the payment of the note on October 1, 2017.

4. What effective rate of interest did Valentino pay? Round effective interest rate calculations to four decimal places, but enter as a percentage with two decimals; for example, .17629 rounds to .1763 and would be entered as 17.63, indicating 17.63%.