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, 2018. Amber paid for the lathe by issuing a $700,000, 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 11% 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, 2018, for Truax Corporation's sale 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 for Truax. Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1A Req 1B Reg 2 Reg 3 Complete the below table to prepare the company's journal entry. (Round final answers to the nearest whole dollar.) Table values are based on: n = 3 i = 10.0% X Cash Flow Amount Interest 42,000 $ Principal $ 700,000 Price of equipment $ Present Value 104,448 X 525,921 X 630,369 Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Reg 2 Req3 Prepare the journal entry on January 1, 2018, for Truax Corporation's sale of the lathe. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round final answers to the nearest whole dollar.) View transaction list Journal entry worksheet 1 > Record for Truax Corporation's sale of the lathe. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2018 Record entry Clear entry View general journal 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, 2018. Amber paid for the lathe by issuing a $700,000, 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 11% 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, 2018, for Truax Corporation's sale 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 for Truax. Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 2 Reg 3 Prepare an amortization schedule for the three-year term of the note. (Do not round intermediate calculations. Round final answers to the nearest whole dollar.) Cash Payment Effective Interest Increase in Balance Outstanding Balance 1 2 3 Total Journal entry worksheet Record the interest in year 2. Note: Enter debits before credits. General Journal Debit Credit Event 2 Record entry Clear entry View general journal Journal entry worksheet Record the interest in year 3. Note: Enter debits before credits. General Journal Debit Credit Event 3 Record entry Clear entry View general journal Journal entry worksheet Record the payment of the note at maturity. Note: Enter debits before credits. Event General Journal Debit Credit 4 Record entry Clear entry View general journal
