Assume that your company issued a $12,600, three-year, zero-interest-bearing note to Ayayai Company. Let's assume further...

   

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Assume that your company issued a $12,600, three-year, zero-interest-bearing note to Ayayai Company. Let's assume further that the note is marketable. The implicit rate that equated the total cash to be paid ($12,600 at maturity) to the present value of the future cash flows ($10,579.21 cash proceeds at the date of issuance) was 6%. Assume that the market rate of interest for a similar interest- bearing note is also 6%. The timeline that shows the one cash flow is as follows: Present Value PV 0 50 Interest Rate =6% n=3 So 2 $12,600 Principal So Interest Prepare the discount amortization schedule using the effective interest method as well as the year-end journal entry to record the interest. (Round answers to 2 decimal places, eg. 5,275.25.) Date of issue End of Year 1 End of Year 2 End of Year 3 $ Cash Paid Schedule of Note Discount Amortization Effective Interest Method 0% Note Discounted at 6% S Interest Expense Discount Amortized Carry O End of Year 3 (List debit entry before credit entry. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to 0 decimal places, eg. 5,275.) Debit Account Titles eTextbook and Media List of Accounts Credit Assume that your company issued a $12,600, three-year, zero-interest-bearing note to Ayayai Company. Let's assume further that the note is marketable. The implicit rate that equated the total cash to be paid ($12,600 at maturity) to the present value of the future cash flows ($10,579.21 cash proceeds at the date of issuance) was 6%. Assume that the market rate of interest for a similar interest- bearing note is also 6%. The timeline that shows the one cash flow is as follows: Present Value PV 0 50 Interest Rate =6% n=3 So 2 $12,600 Principal So Interest Prepare the discount amortization schedule using the effective interest method as well as the year-end journal entry to record the interest. (Round answers to 2 decimal places, eg. 5,275.25.) Date of issue End of Year 1 End of Year 2 End of Year 3 $ Cash Paid Schedule of Note Discount Amortization Effective Interest Method 0% Note Discounted at 6% S Interest Expense Discount Amortized Carry O End of Year 3 (List debit entry before credit entry. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to 0 decimal places, eg. 5,275.) Debit Account Titles eTextbook and Media List of Accounts Credit