Adventureland Incorporated purchased metal to build a new roller coaster on December 31, 2020. Adventureland provided a $500,000 down payment and agreed to pay the balance in equal instalments of $200,000 every December 31 for five years. Adventureland could have received a loan from the bank for this amount at 9% interest. Adventureland prepares financial statements in accordance with IFRS. 

Instructions 

a. Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, calculate the amount used to record the note payable issued in the exchange. 

b. Prepare an instalment note repayment schedule for the term of the note. 

c. Prepare the journal entries that would be recorded for the purchase and for the payments and interest on December 31, 2020, 2021, 2022, 2023, 2024, and 2025. 

d. From the lender's perspective, what are the advantages of an instalment note compared with an interest-bearing note?