Dodge City Products borrowed $100,000 cash by issuing a 36-month, $120,880 zero coupon note on January 1,

Question:

Dodge City Products borrowed $100,000 cash by issuing a 36-month, $120,880 zero note on January 1, 2021. The note matures on December 31, 2023.
Required:
1. Prepare the entry to recognize the issuance of the note.
2. Prepare the adjustments to recognize 2021 and 2022 interest.
3. Prepare the entry to recognize 2023 interest and repayment of the note at maturity.
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...