On January 1, Snipes Construction paid for earth-moving equipment by issuing a $450,000, 4-year note that specified 2% interest to be paid on December 31 of each year. The equipments retail cash price was unknown, but it was determined that a reasonable interest rate was 5%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) At what amount should Snipes record the equipment and the note? What journal entry should it record for the transaction?

• rice of Equipment
• General Journal

At what amount should Snipes record the equipment and the note? (Round your answers to the nearest whole dollars.)

Table values are based on:
n =	4
i =	5.0%
Loan repayments	Amount	Present Value
Interest	$9,000
Principal	$450,000
Price of equipment

• Event	General Journal	Debit	Credit
  1	Equipment
  	Discount on notes payable
  	Notes payable		450,000