On December 31, Year 2 ABC rendered services in exchange for a 6%, 6-year promissory note having a face value of $80,000. Interest was to be paid annually. This customers risk level required that money be borrowed at 8% interest.

1. What amount of Service Revenue will ABC record on December 31, Year 2 (the date the note is issued)?
2. Using the effective interest method, determine the unamortized portion of the discount as of December 31, Year 3.