On January 1, Swifty Corporation lent $51,000 to Windsor, Inc., accepting Windsor’s $67,881, three-year, zero-interest-bearing note. The implied interest is 10%.
(a)
Prepare Swifty’s journal entries for the initial transaction, recognition of interest each year assuming use of the effective interest method, and the collection of $67,881 at maturity. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)