Pancake Inc. agreed to loan Half Food Co. On 1/1/2020 (beginning of year 1), Half Food Co. gave a $ 36,000 zero interest-bearingnote due in 5 years to Pancake Inc. Assume that the market interest rate to discount the note is 9%.

Instructions:

1. Determine the present value of the zero-interest bearing note. You should use an appropriate factor (in five decimals) from a table in Ch. 6.

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2. Record the journal entry Pancake (i.e. the lender) would make to record the receipt of the note on 1/1/2020. Do not provide journal entry from other dates or points will be deducted.

Date	Account title				Debit		Credit

c. Prepare an amortization schedule for the note using the effective interest method.

Year	Cash Interest	Interest revenue	Discount amortized	Carrying amount of note
Date of receipt
End of year 1
End of year 2
End of year 3
End of year 4
End of year 5