Part II: $(5$ points$)$

Problem: $-$ Entries for Zero$-$Interest$-$Bearing Note $($CLO # $1$&$2)$

On December $31,2015,$ Faital Company acquired a computer from Plato Corporation by issuing a $600,000$ zero$-$interest$-$bearing note, payable in full on December $31,2019.$ Faital Company's credit rating permits it to borrow funds from its several lines of credit at $10\%.$ Thecomputer is expected to have a $5-$ year life and a $70,000$ residual value.

Instructions

$($a$)$ Prepare the journal entry for the purchase on December $31,2015.$

$($b$)$ Prepare any necessary adjusting entries relative to depreciation $($use straight$-$line$)$ and amortization on December $31,2016.$

$($c$)$ Prepare any necessary adjusting entries relative to depreciation and amortization on December $31,2017.$