DeFilippo Company agreed to loan Morreale Glass Corporation $400,000. Morreale Glass Corporation gave a zero-interest-bearing note due in 4 years and also promised to provide DeFilippo Company with glass products at a special discount price. (A 12% interest rate is an appropriate rate for both companies.)
Instructions
(a) Prepare the journal entry DeFilippo Company would make to record this transaction. (b) Prepare an amortization schedule for the note using the effective-interest method.