On January 1, Novak Corporation issues a $120,000, 10-year non-interest-bearing note to Camden Production for new machinery.

The market interest rate is 11% and Camden is to pay $12,000 as an instalments at the end of each year. Fair value for a purchase of the new machinery in cash is not available from the supplier at this time.

1. FIND PURCHASE PRICE

2. PREPARE JOURNAL ENTRY TO RECORD MACHINERY PURCHASE

3. RECORD JOURNAL ENTRY FOR FIRST INSTALLMENT PAYMENT ON THE NOTE ON DEC 31

On January 1, Novak Corporation issues a $120,000,10-year non-interest-bearing note to Camden Production for new machinery. The market interest rate is 11% and Camden is to pay $12,000 as an instalments at the end of each year. Fair value for a purchase of the new machinery in cash is not available from the supplier at this time. Click here to view Table A.4-PRESENT VALUE OF AN ORDINARY ANNUITY OF 1 (a) 8 Your answer is incorrect. Calculate the purchase price using any of the three methods (tables, financial calculator, or Excel). (Round factor values to 5 decimal ploces, e.g. 1.25124 and final answer to 0 decimal places, e.g. 5.275.) Purchase price $ eTextbook and Media List of Accounts Attempts: 1 of 3 used (b) The parts of this question must be completed in order. This part will be avallable when you complete the part above- (c) The parts of this question must be completed in order. This part will be available when you complete the part above