Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe.
∙ The machine was completed and ready for use on January 1, 2024.
∙ Amber paid for the lathe by issuing a $600,000, three-year note that specified 4% interest, payable annually on December 31 of each year.
∙ The cash market price of the lathe was unknown.
∙ It was determined by comparison with similar transactions that 12% was a reasonable rate of interest.

Required:
1. Prepare the journal entry on January 1, 2024, for Amber Mining and Milling’s purchase of the lathe.
2. Prepare an amortization schedule for the three-year term of the note.
3. Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity.