Nicholas Company loaned $68,587 to Nathan, Inc. in exchange for Nathan’s 2-year, $80,000, zero-interest-bearing note. Nathan’s incremental...

Nicholas Company loaned $68,587 to Nathan, Inc. in exchange for Nathan’s 2-year, $80,000, zero-interest-bearing note. Nathan’s incremental borrowing rate for comparable debt is 8%.

Required:

Prepare an effective interest amortization schedule for Nicholas relative to this note. (Round to whole dollars.)

Prepare Nicholas’ journal entries for the initial loan transaction, recognition of interest each year, and the collection of the note at maturity.

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jeff jeffy answered 1 week ago

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