Buffalo Limited has been experiencing increased customer demand for its specialty food products. To meet this demand, the comp has bought additional refrigeration units to hold more inventory. To finance this purchase, Buffalo issued a four$-$year non$-$interestbearing note, with a face value of $$760,000.$ The prevailing interest rate for similar instruments is $8\%.$ The company agreed to repa the note in four equal instalments. Buffalo used the effective interest method to amortize any premium or discount.

the factor table PRESENT VALUE OF $1.$

the factor table PRESENT VALUE OF AN ANNUITY OF $1.$

$($a$)$

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.$)($Round present value factor calculations to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and final answer to $0$ decimal places e$.$g$.58,971.$ 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. List all debit entries before credit entries.$)$

Account Titles and Explanation

Debit

Credit