Q3. Use the following information to answer Q3a and Q3b.

On Jan 1, 2019 Ace Co. issued a $28,000, 4-year, zero-interest-bearing note to GE Ltd, for new equipment. Ace promised to pay the note off in 4 equal installments beginning Dec 31, 2019. The rate of interest for similar transactions was 10%.

The appropriate factors for the time value of money at a 10% rate of interest are as follows.

Future value of $1 for 4 periods 1.46

Future value of an ordinary annuity for 4 periods 4.64

Present value of $1 for 4 periods 0.68

Present value of an ordinary annuity for 4 periods 3.17

Q3b. Provide the journal entries required by Ace for Dec 31, 2020. [1 marks for wholly correct answer] No credit for answers submitted without plausible calculations Dec 31, 2020 Dr. Cr.