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, 2016. Amber paid for the lathe by issuing a $720,000, 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 20% 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 below table to prepare the company's journal entry.

1-b.	Prepare the journal entry on January 1, 2016, for Truax Corporations sale of the lathe. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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 for Truax. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Table values are based on: Present Value 20.0% Cash Flow Amount Interest $ 28,800 Principal $ 720,000 Price of machinery Journal entry worksheet Record for Truax Corporation's sale of the lathe. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2016 Record entry Clear entry View general journal Cash Payment Effective Interest Increase in Balance Outstanding Balance $ 1 2 28,800 28,800 Total $ 57,600 View transaction list 1 Record the interest in year 1. 2 Record the interest in year 2. 3 Record the interest in year 3. 4 Record the payment of the note at maturity. Credit Note : = journal entry has been entered Record entry Clear entry View general journal