Royall Company purchased factory equipment by signing a 5-year zero interest bearing note which requires a single payment of $160,000 at the maturity of the note. The market interest rate at the time of signing the note was 3%. Provide journal entry for recoding the purchase of equipment.

Royall Company purchased a delivery truck at $25,000 plus 8% sales taxes. Royall paid $3,000 in cash and financed the rest at 6% requiring 40 equal monthly payments at the end of each month. Compute the amount of the monthly payment that Royall must pay.