Amber Mining and Milling, Incorporated, contracted with Truax Corporation to have constructed a custom$-$made lathe.

The machine was completed and ready for use on January $1,2024.$

Amber paid for the lathe by issuing a $$550,000,$ 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.

Required:

$1-$a$.$ Complete the table below to determine the price of the equipment.

$1-$b$.$ Prepare the journal entry on January $1,2024,$ 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.