M$9-12($Algo$)$ Computing Present Values and Recording Long$-$Term Liabilities LO$9-8$

Mukilteo Company signed a note for $$75,000$ to purchase a new piece of equipment. Mukilteo will pay back the $$75,000$ at the end of two years along with any accrued interest. The annual interest rate on the loan is $5$ percent.

Required:

Note: Use appropriate factor$($s$)$ from the tables provided.

Compute the present value of this long$-$term liability. $($FV of $$1,$ PV of $$1,$ FVA of $$1,$ and PVA of $$1)$

Prepare the journal entry Mukilteo will record on the day it purchases the piece of equipment and signs the note.