On January 1, Novak Corp. lent $37,000 to Windsor, Inc., accepting Windsors $49,247, three-year, zero-interest-bearing note. The implied interest is 10%. (a) Prepare Novaks journal entries for the initial transaction, recognition of interest each year assuming use of the effective interest method, and the collection of $49,247 at maturity. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
enter an account title to record initial transaction	enter a debit amount	enter a credit amount
enter an account title to record initial transaction	enter a debit amount	enter a credit amount
(To record initial transaction)
enter an account title to record interest income in the first year	enter a debit amount	enter a credit amount
enter an account title to record interest income in the first year	enter a debit amount	enter a credit amount
(To record interest income in the first year)
enter an account title to record interest income in the second year	enter a debit amount	enter a credit amount
enter an account title to record interest income in the second year	enter a debit amount	enter a credit amount
(To record interest income in the second year)
enter an account title to record interest income in the third year	enter a debit amount	enter a credit amount
enter an account title to record interest income in the third year	enter a debit amount	enter a credit amount
(To record interest income in the third year)
enter an account title to record collection at maturity	enter a debit amount	enter a credit amount
enter an account title to record collection at maturity	enter a debit amount	enter a credit amount
(To record collection at maturity)