In January 2019, Cordova Company entered into a contract to acquire a new machine for its factory. The machine, which has a cash price of $250,000, was paid for as follows: Down payment Note payable in 4 equal annual payments starting in January 2020 $50,000 $160,000 600 shares of Cordova preferred stock with a mutually agreed value of $100 per share (par value $100) Fair rate of interest on the non-interest-bearing note $60,000 10% Required: 1. Determine the cost of the machine. What principle guides the determination of the cost of the machine? 2. Prepare the journal entry to record the acquisition of the machine. 3. Next Level How would your answer change, if at all, if the $250,000 cash price were not available? $2 1 DATE 3 5 Jan. 1 Machine ACCOUNT TITLE GENERAL JOURNAL Additional Paid-In Capital on Preferred Stock Discount on Notes Payable Notes Payable Preferred Stock Cash POST REF DEBIT 250,000.00 200,000.00 Score: 67/73 CREDIT 50,000.00 160,000.00 60,000.00 50,000.00