On January $1,2022,$ Green Company accepted a promissory note with a face value of $$500,000,$ a due date of January $1,2027,$ and a stated rate of $3\%,$ with interest receivable on December $31$ of each year, in exchange for services rendered. Under the circumstances, the note is considered to have an appropriate market rate of interest of $7\%.$

Instructions

$($a$)$ Using the PV functions in Excel, determine the present value of the note. This should be done by having an input section with the note information.

$($b$)$ Prepare a Schedule of Note Discount$/$Premium Amortization for Green Company under the effective interest method. Again, this should be done by having an input section and using cell reference formulas to complete the schedule.

$($c$)$ Journalize the necessary entries for $2022$ and $2023.$ Assume that Green Company prepares financial statements annually on December $31.$