Collins Corporation bought a computer on December 31, 2020, paying $30,000 down with a further $75,000 payment due on December 31, 2023. An interest rate of 10% is implicit in the purchase price. Collins uses the effective interest method and has a December 31 year end. Collins prepares financial statements in accordance with ASPE. 

Instructions 

a. Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, prepare the journal entry(ies) at the purchase date. Round to the nearest dollar. 

b. Prepare any journal entry(ies) required at December 31, 2021, 2022, and 2023. Round to the nearest cent. 

c. Can Collins choose a different method of amortizing any premium or discount on its notes payable? Explain your answer.