Sunland Inc. has decided to purchase equipment from Central Michigan Industries on January $2,2025,$ to expand its productionSunland Inc. has decided to purchase equipment from Central Michigan Industries on January $2,2025,$ to expand its production

capacity to meet customers' demand for its product. Sunland issues an $$1,440,000,5-$year, zero$-$interest$-$bearing note to Central

Michigan for the new equipment when the prevailing market rate of interest for obligations of this nature is $12\%.$ The company will

pay off the note in five $$289,000$ installments due at the end of each year ower the life of the note.

$($a$)$

Prepare the journal entry at the date of purchase. $($Round foctor values to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and final answers to $0$ decimal

places es$.5,275.$ Credit account titles are automatically indented when omount is entered Do not indent manually. If no entry is required,

select $"$No Entry" for the account tities and enter $0$ far the amounts List all debit entries before credit entries.$)$

eTextbook and Media

List of Accounts

$($b$)$

Prepare the journal entry at the end of the first year to record the payment and interest, assuming that the comparry employs the

effective$-$interest method. $($Round answers to $0$ decimal places, eg$.5\mathrm{.}275.$ Credit account titles are autamatically indented when

amount is entered. Do not indent manually. If no entry is required seiect $"$No Entry" for the account titles and enter $0$ for the amounts. List

all debit entries before credit entries.$)$

eTextbook and Media

List of Accounts

$($c$)$

Prepare the journal entry at the end of the second year to record the payment and interest. $($Round answers to $0$ decimal places, e$.$g$.$

$5,275.$ Credit account titles are autamatically indented when amount is entered. Do not indent manually. If no entry is required, select $$

Entry for the account titles and enter $0$ for the amounts. List alf debit entries befare credit entries.$)$

capacity to meet customers' demand for its product. Sunland issues an $$1,440,000,5-$year, zero$-$interest$-$bearing note to Central

Michigan for the new equipment when the prevailing market rate of interest for obligations of this nature is $12\%.$ The company will

pay off the note in five $$289,000$ installments due at the end of each year ower the life of the note.

$($a$)$

Prepare the journal entry at the date of purchase. $($Round foctor values to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and final answers to $0$ decimal

places es$.5,275.$ Credit account titles are automatically indented when omount is entered Do not indent manually. If no entry is required,

select $"$No Entry" for the account tities and enter $0$ far the amounts List all debit entries before credit entries.$)$

eTextbook and Media

List of Accounts

$($b$)$

Prepare the journal entry at the end of the first year to record the payment and interest, assuming that the comparry employs the

effective$-$interest method. $($Round answers to $0$ decimal places, eg$.5\mathrm{.}275.$ Credit account titles are autamatically indented when

amount is entered. Do not indent manually. If no entry is required seiect $"$No Entry" for the account titles and enter $0$ for the amounts. List

all debit entries before credit entries.$)$

eTextbook and Media

List of Accounts

$($c$)$

Prepare the journal entry at the end of the second year to record the payment and interest. $($Round answers to $0$ decimal places, e$.$g$.$

$5,275.$ Credit account titles are autamatically indented when amount is entered. Do not indent manually. If no entry is required, select $$

Entry for the account titles and enter $0$ for the amounts. List alf debit entries befare credit entries.$)$