Question: Problem 1 : Zero Interest Bearing Note Kohl Company loaned $ 6 6 , 1 1 6 to Hemingway, Inc, accepting Hemingway's 2 - year,

Problem 1: Zero Interest Bearing Note
Kohl Company loaned $66,116 to Hemingway, Inc, accepting Hemingway's 2-year, $80,000, zero-
interest-bearing note. The implied interest rate is 10%.
Instructions: Prepare Kohl's journal entries for the initial transaction, recognition of interest each
year, and the collection of $80,000 at maturity.
Problem 1: Zero Interest Bearing Note Kohl Company loaned $66,116 to

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