Kohl Company lent $51,400 to Hemingway, Inc, accepting Hemingway's 2-year, $63,444, zero-interest-bearing note. The implied interest rate

Question:

Kohl Company lent $51,400 to Hemingway, Inc, accepting Hemingway's 2-year, $63,444, zero-interest-bearing note. The implied interest rate is 11.1%. Prepare Kohl's journal entries for the initial transaction, recognition of interest each year, and the collection of $63,444 at maturity.