Muszynski Corporation issued a $75,000, four-year, zero-interest-bearing note to Samson Corp. on January 1, 2012, and received $47,664 cash. The implicit interest rate is 12%.
(a) Prepare Muszynski’s journal entry for the January 1 issuance.
(b) Prepare Muszynski’s journal entry for the December 31 recognition of interest.
(c) Assume that the effec- tive interest of 12% had not been provided in the data. Prove the effective interest rate of 12% using a financial calculator or computer spreadsheet function.
(d) Prepare an effective-interest amortization table for the note.