INTEREST-BEARING NOTE WITH ANNUAL INTEREST PAYMENTS. Kiwi Corporation issued at par a 2-year, $200,000, 8% interest-bearing note on September 1, 19x7. Interest is paid annually on August 31. The principal and the final interest payment are due on August 31, 19x9.

REQUIRED:

1. Prepare the entry to recognize the issuance of the note.

2. Prepare the adjustment to recognize the interest expense on December 31, 19x7.

3. Prepare the August 31, 19x8, entry to record the first interest payment and 19x8 interest to date.