Example : On January $1,2007$ MacGregor, Inc. purchased a new machine and financed this purchase by making a cash down payment of $$25,000$ and issuing a $6\%,5-$year note that will be paid in five annual installments of $$75,000$ each payable on December $31.$

Determine the original cost of the machine and the correct journal entry.

Determine the carrying value of the note at the end of the third year $($after the Dec. ${31}^{st}$ payment has been recorded.