P&G Co. made a loan and received in exchange a 3-year, $50,000 note bearing interest 6 percent. The market rate of interest for a note of similar risk is 7 percent. How does P&G record the receipt of the note? Do calculations for discount amortizations if applicable along with early journal entries the company had to pass.

Requirement

1. Prepare a table showing appropriate journal and adjusting entries by the end of each year.      
2. Why the treatment of long-term notes receivable is different as compared to short-term note receivable?