On December 31, 2010, Global Enterprise Inc. purchased a machinery for $125,000 cash and agreed to pay the balance in 20 equal installments of $250,000 at the end of each quarter starting on March 31, 2011. In addition, there will be a one time payment of $500,000 at the end of the last quarter. A note was issued for these payments. An assumed interest of 6% (APR) is implicit in the deal.

1. What is the purchase price for this machinery?

2. Prepare an amortization schedule for this note.

3. How much is the interest expense for this note for 2011?

4. How much is the total liability for this note as of December 31, 2011 after the installment payment due on that date?

5. How much is the long-term portion and the current portion of this liability as of December 31, 2011?