Holly Springs, Inc. contracted with Coldwater Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2021. Holly Springs paid for the lathe by issuing a $230,000 note due in three years. Interest, specified at 3%, was 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 for which 7% was a reasonable rate of interest. Holly Springs uses the effective interest method of amortization. (FV 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.)

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Req 1 Prepare the journal entry on January 1, 2021, for Holly Springs' purchase of the lathe. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction lit Journal entry worksheet > Record for the Holly Springs' purchase on January 1, 2021. . Note: Enter debits before credits General Journal Debit Credit Date January 01, 2021 Complete this question by entering your answers in the tabs below. Reg 2 Required 1 Required 2 Required 3 Prepare an amortization schedule for the three-year term of the note. (Round your intermediate and final answers to the nearest whole dollar) Year Cash Payments Effective Interest Increase in Balance Outstanding Balance 1 2 2 3 (Required 1 Required 3 > 3 View transaction list View journal entry worksheet Reg 3 No General Journal Debit Credit Transaction 2-1 No Transaction Recorded 1 Record the interest for first year. Record the interest for second year. Record the interest for third year. . Record the entry for payment of the note at maturity, , 2 a-2 No Transaction Recorded 3 a-3 No Transaction Recorded 4 4 b No Transaction Recorded ( Required 2 Required