Question Details
Amber Mining and Milling, Inc., contracted with Truax
Corporation to have constructed a custom-made lathe. The machine
was completed and ready for use on January 1, 2013. Amber paid for
the lathe by issuing a $600,000, three-year note that specified 6%
interest, payable annually on December 31 of each year. The cash
market price of the lathe was unknown. It was determined by
comparison with similar transactions that 10% was a reasonable rate
of interest. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of
$1and PVAD of $1) (Use appropriate factor(s) from the
tables provided.)
|
| Required: |
| 1.1 |
Complete the below table to prepare the company's journal
entry.
|
Prepare an amortization schedule for the three-year term of the
note.
Prepare the journal entries to record (a) interest for each of
the three years and (b) payment of the note at maturity
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This question was answered on: Dec 08, 2020
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DATE ANSWEREDDec 08, 2020
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