Question $8$ of $11$

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Newman Acrobats lent $$25,972$ to Donaldson, Inc., accepting Donaldson's $2-$year, $$32,000,$ 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 $$32,000$ at maturity. $($Round answers to $0$ decimal places, e$.$g$.5,275.$ If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.$)$

Account Titles and Explanation

$($To record the initial transations$)$

$($To record the recognition of interest in year one$)$

$($To recognize the interest in year $2)$

$($To record the collection of the note$)$