Kerby Company will issue a $ 400,000, five-year, 7 percent periodic and lump- sum payment note when the market interest rate is 8 percent. The face rate of interest is paid semiannually. Determine the amount of cash the company will receive from the note. Describe the cash outflows Kerby will pay on the note over its life. What is the interest expense shown on the budgeted income statement for the first year?