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 $550,000, 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 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 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. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Reg 2 Req 3 Complete the table below to determine the price of the equipment. (Round final answers to the nearest whole dollar.) Table values are based on: n = Cash Flow Amount Present Value Interest Principal Price of equipment Reg 1A Reg 1B Reg 2 Reg 3 Prepare the journal entry on January 1, 2021, for Amber Mining and Milling's purchase of the lathe. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round intermediate calculations and final answers to the nearest whole dollar.) View transaction list Journal entry worksheet Record the Amber Mining and Milling's purchase of the lathe. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2021 Record entry Clear entry View general journal Req 1A Reg 1B Reg 2 Reg 3 Prepare an amortization schedule for the three-year term of the note. (Round intermediate calculations and final answers to the nearest whole dollar.) Cash Payment Effective Interest Increase in Balance Outstanding Balance 1 2 3 Total Req 1A Req 1B Reg 2 Reg 3 Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round intermediate calculations and final answers to the nearest whole dollar.) View transaction list X 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
