The new process equipment was financed by a promissory note signed with the equipment vendor on January 2,

2020. The note is repayable in two instalments of $800,000 on each of December 31, 2021 and December 31,

2022. The note carries a 2% interest rate, with interest payable each year on December 31. The price of the

equipment was a little more than management expected to pay, but the deal came with a very attractive

financing offer. The best rate Blaze was able to negotiate for bank financing was 5% and that required personal

guarantees from the owners - so they didn't go the bank financing route. Your analysis of Blaze's ledger show

that the note payable was recorded at a value of $1,600,000 and interest of $32,000 was expensed and paid as of

December 31, 2020.

1. The journal entries required to correct Blaze's note payable balance and any related accruals, or a statement

that no adjustment is necessary.

2. Detailed calculations and explanations for the amounts in your journal entries, or a detailed explanation of

why no adjustment is necessary.

3. The financial statement presentation and related amounts that will appear on Blaze's December 31, 2020

balance sheet including any related note disclosure.