Blanchard Inc. acquired a packaging machine from CCC Corporation. CCC Corporation completed construction of the machine on January 1, 2020. In payment for the $4 million machine, Blanchard Inc. issued a three-year installment note to be paid in three equal payments at the end of each year. The payments include interest at the rate of 6%.

1. Prepare the journal entry for Blanchards purchase of the machine on January 1, 2020

January 1, 2020:

PVA(i=3%, n=3) = 2.82861, PVA(i=3%, n=6) = 5.41719, PVA(i=6%, n=3) = 2.67301, PVA(i=6%, n=6) = 4.917322. Prepare the partial amortization schedule for the first two years of the 3-year installment note

Amount of Loan
/ present value of an ordinary annuity (PVA) of $1
Installment payment (Rounded up to the nearest integer)

Date	Cash Payment	Effective Interest	Decrease in Balance	Outstanding Balance
1/1/2020
12/31/2020
12/31/2021
12/31/2022	Not required	Not Required	Not Required	Not Required

3. Prepare the journal entry for the installment payments on December 31, 2020 and December 31, 2021.

December 31, 2020:

December 31, 2021