1. On June 30, 2011, Kimberly Farms purchased custom-made harvesting machinery from a local producer. In payment, Kimberly signed a non interest-bearing note requiring the payment of $60,000 in two years. The fair value of the machinery is not known, but an 8% interest rate properly reflects the time value of money for this type of loan agreement. At what amount will Kimberly initially value the machinery? How much interest expense will Kimberly recognize in its income statement for this note for the year ended December 31, 2011?