ZERO COUPON NOTE. Johnson Company sold for $90,000 a $102,400, 2- year zero-coupon note on January 1,
Question:
ZERO COUPON NOTE. Johnson Company sold for $90,000 a $102,400, 2-
year zero-coupon note on January 1, 19x7. The note matures on December 31, 19x8.
REQUIRED:
1. Prepare the entry to record the sale of the note.
2. Prepare the adjustment to recognize the 19x7 interest expense.
3. Prepare the entry to recognize the 19x8 interest expense and the repayment of the note on December 31, 19x8.
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