Blackboard Homework: Bb $7-1$

Problem $1$: On January $1,$ Kohl Company loaned $$66,116$ to Hemingway, Inc, accepting Hemingway's $2-$year, $$80,000,$ zero$-$interest$-$bearing note. The implied interest rate is $10\%.$

$($A$)$ Prepare Kohl's journal entries for the initial transaction, recognition of interest each year, and the collection of $$80,000$ at maturity.

$($B$)$ Name the financial statement and section of the financial statement where Kohl, Inc. will report the note.