Aero Acrobats lent $15,944 to Afterburner, Inc., accepting Afterburners 2-year, $20,000, zero-interest-bearing note. The implied interest rate

Question:

Aero Acrobats lent $15,944 to Afterburner, Inc., accepting Afterburner’s 2-year, $20,000, zero-interest-bearing note. The implied interest rate is 12%. Prepare Aero’s journal entries for the initial transaction, recognition of interest each year, and the collection of $20,000 at maturity.