Prepare Journal entry

Truck #2 has a list price of $31,520 and is acquired for a down payment of $3,940 cash and a zero-interest-bearing note with a face amount of $27,580. The note is due April 1, 2018. Vaughn would normally have to pay interest at a rate of 9% for such a borrowing, and the dealership has an incremental borrowing rate of 8%.