Straight Industries purchased a large piece of equipment from Curvy Company on January 1, 2022. Straight Industries signed a note, agreeing to pay Curvy Company $400,000 for the equipment on December 31, 2024. The market rate of interest for similar notes was 8%. The present value of $400,000 discounted at 8% for three years was $317,532. On January 1, 2022, Straight Industries recorded the purchase with a debit to equipment for $317,532 and a credit to notes payable for $317,532.