On September 1, 2020, Groton Corporation borrowed $2 million and issued a ten-month note. Interest was discounted at issuance at a 6% discount rate. Prepare the journal entries to record the issuance of the noninterest-bearing note and all subsequent events related to the note through June 30, 2021. What would be the annual effective interest rate?

Required; 1) Issuance of note (September 1, 2020):

2) Adjusting entry (December 31, 2020, Fiscal Year End):

3) Maturity (June 30, 2021):

4) Annual effective interest rate:

Discount ,

Cash proceeds

Interest rate for 10 months

Conversion factor Annual effective interest rate