Amber Mining and Milling Inc., contracted with Traux Corporation to have constructed a custom-made lathe. the machine was completed and ready for use on January 1st 2016. Amber paid for the lathe by issuing a $600,000 3 year note that specified 4% interest payable annually on December 31st of each year. the cash market price of the lathe was unknown. it was determined by comparison with similar transactions they 12% was a reasonable rate of interest

1. prepare the journal entry on January 1st 2016 for Amber Mining and Milling purchase of the lathe. 2. prepare and amortization schedule for the three-year term of the note. 3. prepare the journal entries to record interest for each of the three years and payment of the note at maturity.