Cullumber Inc. decided to purchase equipment from Central Ontario Industries on January 2, 2020, to expand its production capacity to meet customers demand for its product. Cullumber issued a $857,000, 4-year, noninterest-bearing note to Central Ontario for the new equipment when the prevailing market interest rate for obligations of this nature was 11%. The company will pay off the note in 4 $214,250 instalments due at the end of each year of the notes life. (The tables in this problem are to be used as a reference for this problem.)

Prepare the journal entry at the date of purchase. Calculate the purchase price using any of the three methods (table the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account 1.25124 and final answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Jan. 2, 2020 SHOW LIST OF ACCOUNTS LINK TO TEXT Prepare the journal entries at the end of the first year to record the payment of principal and interest, assuming that indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" f places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Dec. 31, 2020 Jan. 2, 2021 Prepare the journal entries at the end of the second year to record the payment of principal and interest. manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the ar Debit Credit Date Account Titles and Explanation Dec. 31, 2021 Jan. 2, 2022 SHOW LIST OF ACCOUNTS LINK TO TEXT Assuming that the equipment has an 6-year life and no residual value, prepare the journal entry that is are automatically indented when the amount is entered. Do not indent manually. If no entry is answers to 0 decimal places, e.g. 5,275.) Debit Credit Date Account Titles and Explanation Dec. 31, 2020