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 $650,000, three-year note that specified 3% 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 12% 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, 2021, for Truax Corporation's sale of the lathe. Assume Truax spent $450,000 to construct 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. Req 1A Reg 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 12.0% $ Cash Flow Amount Interest $ 19,500 Principal $ 650,000 Price of equipment Present Value 46,836 462,657 509,493 $ Reg 1A Reg 1B Reg 2 Req3 Prepare the journal entry on January 1, 2021, for Truax Corporation's sale of the lathe. Assume Truax spent $450,000 to construct 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 entry for Truax Corporation's sale of the lathe. Note: Enter debits before credits. General Journal Debit Credit Date January 01, 2021 Record entry Clear entry View general journal Reg 1A Reg 1B Reg 2 Reg 3 Prepare the journal entry on January 1, 2021, for Truax Corporation's sale of the lathe. Assume Truax spent $450,000 to construct 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 Req 1A Reg 1B Reg 2 Req3 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. $ $ $ 19,500 19,500 19,500 58,500 61,139 66,136 71,732 199,007 41,639 46,636 52,232 140,507 509,493 551,132 597,768 650,000 3 Total $ $ $ Reg 1A Reg 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 for Truax. (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 Reg 1A Reg 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 for Truax. (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 interest in year 2. Note: Enter debits before credits. Debit Credit Event 2 General Journal No journal entry required Record entry Clear entry View general journal Reg 1A Reg 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 for Truax. (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 interest in year 3. Note: Enter debits before credits. Debit Credit Event 3 General Journal No journal entry required Record entry Clear entry View general journal
