Exercise 14-20 Installment note; amortization schedule (L014-3) 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 $5.9 million machine, American Food Services issued a four year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 11%. (EV of $1. PV of $1. FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(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. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 2 Req 1 3 and 4 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 2018 2019 Outstanding Balance 4,576,107 3,604,479 2,525,972 1,328.829 1,475,000 X 1,475,000 1,475,000 % 1,475,000 503,372 396,493 X 277,857 146,171 971,628 X 1,078,507 1,197,143 1.328,829 2020 2021 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. Reg 2 Reg 1 3 and 4 Prepare the journal entry for American Food Services' purchase of the machine on January 1, 2018, the first installment payment on December 31, 2018 and the third installment payment on December 31, 2020. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Enter your answers in whole dollars.) View transaction list View journal entry worksheet Credit Debit 4,576,107 4,576,107 0 Record the purchase of the machine on January 1, 2018 503,372 Record the first installment payment on December 31, 2018 971,628 1,475,000 Record the third installment payment on December 31, 2020. 277,857 1.197.143 1.475.000 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, 202 Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg 2 Reg 1 3 and 4 Prepare the journal entry for American Food Services' purchase of the machine on January 1, 2018, the first installment payment on December 31, 2018 and the third installment payment on December 31, 2020. (If no entry is required for a transaction/event, sefect "No journal entry required in the first account field. Enter your answers in whole dollars.) No Date General Journal Credit Debit 4,576,107 1 * January 01, 2018 Cash Notes pavable 4,576,107 2 December 31, 2011 Interest expense Notes payable Cash OOO 503,372 971,628 1,475,000 December 31, 202 Interest expense Notes payable Cash 277,857 1,197,143 1,475,000
