Marta Corporation issued a $75,000, four-year, zero-interest-bearing note to Samson Corp. on January 1, 2014, and received

Question:

Marta issued a $75,000, four-year, zero-interest-bearing note to Samson Corp. on January 1, 2014, and received $47,664 cash. The implicit interest rate is 12%. Marta uses the effective interest method.
(a) Prepare Marta's journal entry for the January 1 issuance.
(b) Prepare Marta's journal entry for the December 31 recognition of interest.
(c) Assume that the effective interest of 12% had not been provided in the data. Prove the effective interest rate of 12% using a financial calculator or computer spreadsheet functions.
(d) Prepare an effective-interest amortization table for the note.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...