Newman Acrobats lent $30,030 to Donaldson, Inc, accepting Donaldson's 2-year, $37,000, zero-interest-bearing note. The implied interest rate is 11%.

Prepare Newman's journal entries for the initial transaction, recognition of interest each year, and the collection of interest each year, and the collection of $ 37,000 at maturity.

No. Account Titles and Explanation Debit Credit

1. ________________________________ _________________ ________________

___________________________________ _____________________ ______________________

___________________________________ _______________________ ________________________

(to record the initial transaction)

2._______________________________ _________________________ _________________________

___________________________________ ____________________________ ___________________________________

(To record the recognition of interest in one year)

3.__________________________________________________ ________________________________ ______________________________

_________________________________________________ ___________________________________ _________________________________-

(To recognize the interest in year 2)

4. ____________________________________ _____________________________________ ____________________________________

____________________________________ ____________________________________ __________________________________________

( To record the collection of the note)