On January 1, 2020, TPM Inc. acquires a piece of equipment for a list price of $300,000. It pays $20,000 immediately and writes a note for the remainder. Annual interest of 3% is due every December 31st, and the principal of the note is payable in 6 years. TPMs incremental borrowing rate is 6%, while the sellers incremental borrowing rate is 7%. TPM is a public company. It depreciates its equipment using the diminishing balance method at 15%. The equipments residual value is $40,000 at the end of its useful life.

Required

1. 1) Prepare all required journal entries for the years 2020 and 2021.

2. 2) Determine the Assets net book value on January 1, 2024.

3. 3) Determine the note payable carrying value on January 1, 2024.