Amber Mining and Milling, Incorporated, contracted with Truax Corporation to have constructed a custom-made lathe. The...

 

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Amber Mining and Milling, Incorporated, contracted with Truax Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2024. Amber paid for the lathe by issuing a $650,000, three-year note that specified 4% 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 9% was a reasonable rate of interest. Required: 1-a. Complete the table below to determine the price of the equipment. 1-b. Prepare the journal entry on January 1, 2024, for Amber Mining and Milling's purchase of the lathe. 2. Prepare an amortization schedule for the three-year term of the note. 3. Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1, FVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Complete this question by entering your answers in the tabs below. 4 Req 1A Req 1B Req 2 Req 3 Complete the table below to determine the price of the equipment. Note: Round final answers to the nearest whole dollar. Round your percentage answer in one decimal place. Table values are based on: N = % Amber Mining and Milling, Incorporated, contracted with Truax Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2024. Amber paid for the lathe by issuing a $650,000, three-year note that specified 4% 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 9% was a reasonable rate of interest. Required: 1-a. Complete the table below to determine the price of the equipment. 1-b. Prepare the journal entry on January 1, 2024, for Amber Mining and Milling's purchase of the lathe. 2. Prepare an amortization schedule for the three-year term of the note. 3. Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1, FVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Complete this question by entering your answers in the tabs below. 4 Req 1A Req 1B Req 2 Req 3 Complete the table below to determine the price of the equipment. Note: Round final answers to the nearest whole dollar. Round your percentage answer in one decimal place. Table values are based on: N = %