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, 2021. Amber paid for the lathe by issuing a $750,000, three-year note that specified 5% 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 9% was a reasonable rate of interest. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1-a. Complete the table below to determine the price of the equipment.

1-b. Prepare the journal entry on January 1, 2021, for Amber Mining and Millings 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.

Table values are based on: n = 9.0% Cash Flow Amount Interest $ 37,500 Principal $ 750,000 Price of equipment $ Present Value 94,923 579,150 $ 674,073 $ Prepare the journal entry on January 1, 2021, for Amber Mining and Milling's purchase of the lathe. (If no entry is rec a transaction/event, select "No journal entry required" in the first account field. Round intermediate calculations and answers to the nearest whole dollar.) Debit Credit No 1 Date General Journal January 01, 2021 Equipment Discount on notes payable Discount on notes payable Cash Payment Effective Interest Increase in Balance Outstanding Balance $ 1 2 37,500 37,500 Total $ 75,000 No Event General Journal Debit Credit