Dodge City Products borrowed $100,000 cash by issuing a 36-month, $120,880 zero coupon note on December 31,

Question:

Dodge City Products borrowed $100,000 cash by issuing a 36-month, $120,880 zero note on December 31, 2012. The note matures on December 31, 2015.

Required:
1. Prepare the entry to recognize issuance of the note.
2. Prepare the adjustments to recognize 2013 and 2014 interest.
3. Prepare the entry to recognize 2015 interest and repayment of the note at maturity. Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...