Pharoah Inc. has decided to purchase equipment from Central Michigan Industries on January 2, 2020, to expand its production capacity to meet customers demand for its product. Pharoah issues a(n) $1,520,000, 5-year, zero-interest-bearing note to Central Michigan for the new equipment when the prevailing market rate of interest for obligations of this nature is 12%. The company will pay off the note in five $304,000 installments due at the end of each year over the life of the note.

Prepare the journal entry at the date of purchase.