Question $5$

On December $31,2025,$ Payson Company acquired a press from Sugar Corporation by issuing

a $$400,000$ zero$-$interest$-$bearing note, payable in full on December $31,2028.$ Payson's credit

rating permits it to borrow funds from its several lines of credit at $8\%.$ The press is expected

to have a $6-$year life and a $$40,000$ salvage value. In the journal entry to record the purchase

of the equipment using the bond, what is the debit to Equipment $($aka the carrying value of

the note$)?$ Round amounts to the nearest dollar and enter your answer without dollar signs or

commas.

Hint: calculate the present value of the note.