Sweet Acacia Limited has been experiencing increased customer demand for its specialty food products. To meet this demand, the company has bought additional refrigeration units to hold more inventory. To finance this purchase, Sweet Acacia issued a four-year noninterest-bearing note, with a face value of $1,000,000. The prevailing interest rate for similar instruments is 11%. The company agreed to repay the note in four equal instalments. Sweet Acacia used the effective interest method to amortize any premium or discount. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1.

Part 1

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Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, prepare the journal entry at the date of purchase. (Hint: Refer to Chapter 3 for tips on calculating.) (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit