Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe. The...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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, 2021. Amber paid for the lathe by issuing a $900,000, three-year note that specified 5% 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 8% was a reasonable rate of interest. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1-a. Complete the table below to determine the price of the equipment. 1-b. Prepare the journal entry on January 1, 2021, 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. Req 1A Req 1B Req 2 Req 3 Complete the table below to determine the price of the equipment. (Round final answers to the nearest whole dollar.) Table values are based on: n = i = Cash Flow Amount Present Value Interest Principal Price of equipment Req 1A Req 1B Req 2 Req 3 Prepare the journal entry on January 1, 2021, for Amber Mining and Milling's purchase of the lathe. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round intermediate calculations and final answers to the nearest whole dollar.) View transaction list Journal entry worksheet 1 <> Record the Amber Mining and Milling's purchase of the lathe. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2021 Req 1A Req 1B Req 2 Req 3 Prepare an amortization schedule for the three-year term of the note. (Round intermediate calculations and final answers to the nearest whole dollar.) Effective Increase in Cash Payment Outstanding Balance Interest Balance 1 2 Total 3. Req 1A Req 1B Req 2 Req 3 Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round intermediate calculations and final answers to the nearest whole dollar.) View transaction list Journal entry worksheet く 1 2 3 4 > Record the interest in year 1. Note: Enter debits before credits. Event General Journal Debit Credit 1 1 2 3 Record the interest in year 2. Note: Enter debits before credits. Event General Journal Debit Credit 2 1 2 3 4 Record the interest in year 3. Note: Enter debits before credits. Event General Journal Debit Credit 3 1 2 3 4 Record the payment of the note at maturity. Note: Enter debits before credits. Event General Journal Debit Credit 4 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, 2021. Amber paid for the lathe by issuing a $900,000, three-year note that specified 5% 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 8% was a reasonable rate of interest. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1-a. Complete the table below to determine the price of the equipment. 1-b. Prepare the journal entry on January 1, 2021, 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. Req 1A Req 1B Req 2 Req 3 Complete the table below to determine the price of the equipment. (Round final answers to the nearest whole dollar.) Table values are based on: n = i = Cash Flow Amount Present Value Interest Principal Price of equipment Req 1A Req 1B Req 2 Req 3 Prepare the journal entry on January 1, 2021, for Amber Mining and Milling's purchase of the lathe. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round intermediate calculations and final answers to the nearest whole dollar.) View transaction list Journal entry worksheet 1 <> Record the Amber Mining and Milling's purchase of the lathe. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2021 Req 1A Req 1B Req 2 Req 3 Prepare an amortization schedule for the three-year term of the note. (Round intermediate calculations and final answers to the nearest whole dollar.) Effective Increase in Cash Payment Outstanding Balance Interest Balance 1 2 Total 3. Req 1A Req 1B Req 2 Req 3 Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round intermediate calculations and final answers to the nearest whole dollar.) View transaction list Journal entry worksheet く 1 2 3 4 > Record the interest in year 1. Note: Enter debits before credits. Event General Journal Debit Credit 1 1 2 3 Record the interest in year 2. Note: Enter debits before credits. Event General Journal Debit Credit 2 1 2 3 4 Record the interest in year 3. Note: Enter debits before credits. Event General Journal Debit Credit 3 1 2 3 4 Record the payment of the note at maturity. Note: Enter debits before credits. Event General Journal Debit Credit 4
Expert Answer:
Answer rating: 100% (QA)
1a Annual interest 90000005 45000 Price of equipment PVA 83Annual interest PVF 83Par value 257710450... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0078025839
9th edition
Authors: J. David Spiceland, James Sepe , Mark Nelson , Wayne Thomas
Posted Date:
Students also viewed these accounting questions
-
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, 2018. Amber paid for the lathe by...
-
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, 2021. Amber paid for the lathe by...
-
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, 2021. Amber paid for the lathe by...
-
The cost formula for the maintenance department of Rainbow, Ltd., is $19,400 per month plus $7,70 per machine hour used by the production department. Required: a. Calculate the maintenance cost that...
-
Design and describe an application-level protocol to be used between an automatic teller machine and a bank's centralized computer. Your protocol should allow a user 's card and password to be...
-
Suppose the gold spot price is $300/oz, the 1-year forward price is 310.686, and the continuously compounded risk-free rate is 5%. a. What is the lease rate? b. What is the return on a cash-and-carry...
-
Saturated steam at \(55^{\circ} \mathrm{C}\) is to be condensed at a rate of \(10 \mathrm{~kg} / \mathrm{h}\) on the outside of a vertical tube of diameter \(3 \mathrm{~cm}\) by maintaining the...
-
The county collector of Sun coast County is responsible for collecting all property taxes levied by funds and governments within the boundaries of the county. To reimburse the county for estimated...
-
In what ways do Lean Management practices facilitate the cultivation of a culture of continuous improvement and empower employees to actively engage in problem-solving initiatives aimed at enhancing...
-
Hotel DelRay is located at the heart of the city of Brussels, in Belgium. Brussels is a major hub for international politics, a home for several international organizations and diplomats, and a...
-
The following information was taken from Novak Corp. cash budget for the month of April Beginning cash balance $ 146000 Cash receipts 132000 Cash disbursements 166000 Depreciation 32000 If the...
-
State the advantages of gaseous fuels over solid and liquid fuels.
-
What are \(L P G\) and \(C N G\) ?
-
Explain the working of a solar flat collector.
-
List various liquid fuels. State their merits over solid fuels.
-
For each of the following companies, specify whether the company would be more likely to use job costing or process costing. a. Yacht builder b. Cereal manufacturer c. Landscaper d. Pet food...
-
Compute the cost of goods sold using FIFO , LIFO and moving - average methods Crane Department Store uses a perpetual inventory system. Data for product E2-D2 includes the following purchases. Date...
-
Quadrilateral EFGH is a kite. Find mG. E H <105 G 50 F
-
For each of the following inventory errors occurring in 2018, determine the effect of the error on 2018's cost of goods sold, net income, and retained earnings. Assume that the error is not...
-
In 2018, Borland Semiconductors entered into the transactions described below. In 2015, Borland had issued 170 million shares of its $1 par common stock at $34 per share. Required: Assuming that...
-
When an item of property, plant, and equipment is disposed of, how is gain or loss on disposal computed?
-
1. Describe the bases of power held by Dr. Jamie Thompson. Describe the bases of power held by Dr. Elizabeth Clarke. 2. What activities and people have contributed to Jaime Thompsons power? What...
-
What is the current in the wire in Figure Q22.1? 1.0 VR + 1.0-1.0V + FIGURE Q22.1
-
Electroconvulsive therapy is a last-line treatment for certain mental disorders. In this treatment, an electric current is passed directly through the brain, inducing seizures. The total charge that...
Study smarter with the SolutionInn App