Exercise $14-17($Algo$)$ Note with unrealistic interest rate; borrower; amortization schedule $[$L$014-3]$

Amber Mining and Milling, Incorporated, contracted with Truax Corporation to have constructed a custommade lathe.

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

Amber paid for the lathe by issuing a $$850,000,$ three$-$year note that specified $4\%$ 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.

Note: Use tables, Excel, or a financial calculator. $($FV of $$1,$ PV of $$1,$ FVA of $$1,$ PVA of $$1,$ FVAD of $$1$ and PVAD of $$1)$

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

Req $1A$

Req $1$ B

Req$2$

Req $3$

Complete the table below to determine the price of the equipment.

Note: Round final answers to the nearest whole dollar. Round your percentage answer in one decimal place.

$\backslash$table$[[$Table values are based on:$],[n=,,,],[i=,,\%,],[$Cash Flow,Amount,,Present Value$],[$Interest$,,,$sence$],[$Principal$,,,$F$],[$Price of equipm,,,$]]$