Company B constructed assembly line equipment for Company A. The construction finished, and the equipment was ready for use on January 1,2021. Company A paid for the equipment by issuing a note. -$225,000-5%years The interest is to be paid on December 31 of each year. Thea note is to be repaid in entirety at the end of four years. Company B custom built the equipment for Company A, so its cash price was unknown. Similar transactions yielded a reasonable interest rate 10%. Complete the following. 1. Prepare the journal entry for Company A's purchase of the equipment on January 1, 2021. 2. Create an amortization schedule for the four-year term of the note. 3. Prepare the journal entry for Company A's third interest payment on December 31, 2023. 4. If Company A's note was an installment note to be paid in four equal payments at the end of each year beginning December 31,2021 , what would the amount of each inst 5. Create an amortization schedule for the four-year term of the installment note. 6. Prepare the journal entry for Company A's third installment payment on December 31, 2023. Part 1 Amortization Schedule \begin{tabular}{l|l|} \cline { 2 } Stated interest rate \\ \hline Stated principal \\ \hline Actual interest paid \\ \hline Present value annuity factor & \\ \cline { 1 - 2 } Present value of interest payment & \\ \cline { 2 } Present value factor \\ Present value of note \\ Price of equipment (present value) \end{tabular} Part 2 Amortization schedule Part 3 Year 3 Interest expense journal \begin{tabular}{|l|l} Account \\ \hline & \\ \hline & \\ \hline \end{tabular} Part 4 Installment payment \begin{tabular}{|l|l|} \hline Price of equipment (present value) \\ Present value annuity factor \\ Installment payment \end{tabular} Part 5 Installment amortization schedule Year 3 Interest expense journal Account Debit Credit Company B constructed assembly line equipment for Company A. The construction finished, and the equipment was ready for use on January 1,2021. Company A paid for the equipment by issuing a note. -$225,000-5%years The interest is to be paid on December 31 of each year. Thea note is to be repaid in entirety at the end of four years. Company B custom built the equipment for Company A, so its cash price was unknown. Similar transactions yielded a reasonable interest rate 10%. Complete the following. 1. Prepare the journal entry for Company A's purchase of the equipment on January 1, 2021. 2. Create an amortization schedule for the four-year term of the note. 3. Prepare the journal entry for Company A's third interest payment on December 31, 2023. 4. If Company A's note was an installment note to be paid in four equal payments at the end of each year beginning December 31,2021 , what would the amount of each inst 5. Create an amortization schedule for the four-year term of the installment note. 6. Prepare the journal entry for Company A's third installment payment on December 31, 2023. Part 1 Amortization Schedule \begin{tabular}{l|l|} \cline { 2 } Stated interest rate \\ \hline Stated principal \\ \hline Actual interest paid \\ \hline Present value annuity factor & \\ \cline { 1 - 2 } Present value of interest payment & \\ \cline { 2 } Present value factor \\ Present value of note \\ Price of equipment (present value) \end{tabular} Part 2 Amortization schedule Part 3 Year 3 Interest expense journal \begin{tabular}{|l|l} Account \\ \hline & \\ \hline & \\ \hline \end{tabular} Part 4 Installment payment \begin{tabular}{|l|l|} \hline Price of equipment (present value) \\ Present value annuity factor \\ Installment payment \end{tabular} Part 5 Installment amortization schedule Year 3 Interest expense journal Account Debit Credit
