1. On Sept 1, 2010 Innsbrook Corporation has just issued a $1,000,000 note. The note will have a 10-year life and a 12 percent face rate of interest that is paid annually.

A. If the market rate of interest for the note is 10 percent, what will be the proceeds of the note (how much cash will be the maker of the note will receive)?

B. Set up an amortization table for the note for the two years of the notes life. How much cash interest will Innsbrook pay during the first year of the notes life? How much interest expense will the note incur during the second year of the notes life?