Use Present Value Tables or your calculator to complete the requirements below. Phillips Enterprises signed notes to make the following two purchases on January 1, 2014: new piece of equipment for $60,000, with payment deferred until December 31, 2015. The appropriate interest rate is 9% compounded annually. small building from Richter Construction. The terms of the purchase require a $75,000 payment at the end of each quarter, beginning March 31, 2014, and ending June 30, 2016. The appropriate interest rate is 2% per quarter. Required: Round your answers to the nearest cent, if rounding is required. 1. Prepare the cash flow diagrams for these two purchases. a. n = years i = % per year

Amount of Payment or Deposit 1/1/14 12/31/15

b. n = quarters i = % per quarter

Amount of Payment or Deposit 1/1/14 3/31/14 6/30/14 9/30/14 6/30/16

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2. Prepare the entries to record these purchases in Phillips' journal.

2014 Jan. 1 (Record purchase of equipment) 2014 Jan. 1 (Record purchase of building)

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3. Prepare the cash payment and interest expense entries for Purchase b at March 31, 2014, and June 30, 2014. If an amount box does not require an entry, leave it blank.

March 31, 2014 (Record loan payment) June 30, 2014 (Record loan payment)

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4. Prepare the adjusting entry for Purchase a at December 31, 2014.

Dec. 31, 2014 (Record accrued interest expense)