intermediate accounting II

CH 14

Please show work and explain. Thank you.

Question 3

Amber Mining and Milling, Incorporated, contracted with Truax Corporation to have constructed a custom-made lathe. - The machine was completed and ready for use on January 1, 2024. - Amber paid for the lathe by issuing a $800,000, three-year note that specified 6% Interest, payable annually on December each year. - The cash market price of the lathe was unknown. - It was determined by comparison with similar transactions that 11% was a reasonable rate of interest. Requlred: 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. 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. repare the journal entry on January 1, 2024, for Amber Mining and Milling's purchase of the lathe. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round intermediate :alculations and final answers to the nearest whole dollar. Journal entry worksheet Record the Amber Mining and Milling's purchase of the lathe. Note: Enter debits before credits. Complete this question by entering your answers in the tabs below. Prepare an amortization schedule for the three-year term of the note. Note: Round intermediate calculations and final answers to the nearest whole dollar. Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round intermediate calculations and final answers to the nearest whole dollar. Journal entry worksheet 4> Note: Enter debits before credits. 1 Record the interest in year 1 . 2 Record the interest in year 2. 3 Record the interest in year 3. 4 Record the payment of the note at maturity