1. Exercise 9-78 (Algorithmic) Zero Coupon Note

   Dodge City Products borrowed $101,000 cash by issuing a 36-month, $125,880 zero coupon note on January 1, 2021. The note matures on December 31, 2023.

   Required:

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

   2021 Jan. 1	Cash Notes Payable Interest Expense Interest Payable Premium on Notes Payable
   	Discount on Notes Payable Interest Expense Interest Payable Notes Payable Premium on Notes Payable
   	Cash Discount on Notes Payable Interest Expense Interest Payable Notes Payable Premium on Notes Payable
   	Record issuance of note at discount

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   2. Prepare the adjustments to recognize 2021 and 2022 interest. Round your answers to the nearest dollar.

   2021 Dec. 31	Cash Discount on Notes Payable Interest Expense Interest Payable Notes Payable
   	Cash Discount on Notes Payable Interest Expense Interest Payable Notes Payable
   	Record interest expense
   2022 Dec. 31	Cash Discount on Notes Payable Interest Expense Interest Payable Notes Payable
   	Cash Discount on Notes Payable Interest Expense Interest Payable Notes Payable
   	Record interest expense

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   3. Prepare the entry to recognize 2023 interest and repayment of the note at maturity. Round your answers to the nearest dollar and if necessary, for final year round to amortize entire amount of discount.

   2023 Dec. 31	Cash Discount on Notes Payable Interest Expense Interest Payable Notes Payable
   	Cash Discount on Notes Payable Interest Expense Interest Payable Notes Payable
   	Record interest expense
   2023 Dec. 31	Cash Discount on Notes Payable Interest Expense Interest Payable Notes Payable
   	Cash Discount on Notes Payable Interest Expense Interest Payable Notes Payable
   	Record payment of note principal