Hill Incorporated purchased metal to build a new roller coaster on December 31, 2020. Hill provided a $500,000 down payment and agreed to pay the balance in equal instalments of $340,000 every December 31 for five years. Hill could have received a loan from the bank for this amount at 9% interest.

1.Prepare the journal entries that would be recorded for the purchase and for the payments and interest on December 31, 2020, 2021, 2022, 2023, 2024, and 2025.