Chapter 14-7-a

American food Services. Inc. acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2018. In payment for the $4.4 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the and of each year. The payments include interest at the rate of 9$. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1, and PVAD of $1) (Use appropriate factors-(s) from the tables provided.)

Required:

1. Prepare the journal entry for American Food Services purchase of the machine on January 1, 2018.
2. Prepare an amortization schedule for the four-year term of the installment note.
3. Prepare the journal entry for the first installment payment on December 31, 2018.
4. Prepare the journal entry for the third installment payment on December 31, 2020.

Complete this question by entering your answers in the tabs below.

Prepare an amortization schedule for the four-year term of the installment note. (Enter your answers in whole dollars.)

Dec.31	Cash Payment	Effective Interest	Decrease in Balance	Outstanding Balance
2018
2019
2020
2021