The note payable calls for a payment of $868,000 at the maturity date, the bookkeeper thinks that this amount should be recorded as a liability and that the difference between this liability amount and the $800,000 proceeds received by the business should be debited to the prepaid expenses asset account. Do you agree?

Assuming quarterly compounding of the quoted 6 percent annual interest rate, determine the amount the business has to pay the bank at the maturity date of the note one year from now.