On 1/1/20 we sell equipment and accept a 3-year note receivable for $73,000.

The market value is $73,000. Payments of $27,310 include both principal and interest and are to be made annually starting on 1/1/21. The present value of the payments is $73,000. The bank would require the purchaser to pay interest of 6% in order to borrow from them. The equipment cost us $100,000 and had a book value of $75,000.

Note: Be sure to show the date of each journal entry. The "right" journal entry on the 'wrong' date is wrong.

a. Prepare an amortization table 

b. Prepare the journal entry for 1/1/20 

c. Prepare the journal entry for 12/31/20 

d. Prepare the journal entry for 1/1/21 

Amortization table: 

Journal entries:                                                               Debits                                                                Credits

Answer rating: 100% (QA)

Amortization Table Period Receipt Interest Reduction in Balance Balance 1120 73000 1121 ... View the full answer