All note payments include interest

Stated rate of interest = Market rate of interest for all notes

except Non-interest bearing notes.

Transaction:

Note 4:

12/31/19 Sold Equipment that has an cost of $475,000;

and accumulated depreciation of$225,000

The company receivedin exchange a down payment of $80,000 and a Note For $250,000 to be paid 12/31/22

The stated rate of interest for the note is 6%.

Requirement A:Record the original transaction, for the seller.

Record the transactions through 12/31/22

Are we using PVOA or Present value of single sum ? why?

12/31/2019

12/31/2020

12/31/2021

12/31/2022

Requirement B:

Record the original transaction, for the purchaser.

Record the transactions through 12/31/22

12/31/2019

12/31/2020

12/31/2021

12/31/2022