Exercise 14 17 Algo Note With Unrealistic Interest Rate Borrower Amortization Schedule Lo14 3 Amber Mining And Mil 1 (48.28 KiB) Viewed 13 times
Exercise 14 17 Algo Note With Unrealistic Interest Rate Borrower Amortization Schedule Lo14 3 Amber Mining And Mil 2 (44.29 KiB) Viewed 13 times
Exercise 14-17 (Algo) Note with unrealistic interest rate; borrower; amortization schedule [LO14-3) Amber Mining and Milling, Inc, contracted with Truax Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2021. Amber paid for the lathe by issuing a $550,000, three year note that specified 4% Interest, payable annually on December 31 of each year. The cash market price of the lathe was unknown. It was determined by comparison with similar transactions that 9% was a reasonable rate of interest (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $.1) (Use appropriate foctor(s) from the tables provided.) Required: 1-o. Complete the table below to determine the price of the equipment 1-b. Prepare the journal entry on January 1, 2021, for Amber Mining and Milling's purchase of the lathe 2. Prepare an amortization schedule for the three-year term of the note. 3. Prepare the journal entries to record (@) Interest for each of the three years and (b) payment of the note at maturity. Complete this question by entering your answers in the tabs below. Reg 11 Reg 10 Reg 2 Reg 3 Complete the table below to determine the price of the equipment. (Round Tino answers to the nearest whole dollar). Table values are based on Cash Flow Amount Present Value
Amber Mining and Milling, Inc, contracted with Truax Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2021. Amber paid for the lathe by issuing a $550,000, three year note that specified 4% Interest, payable annually on December 31 of each year. The cash market price of the lathe was unknown. It was determined by comparison with similar transactions that 9% was a reasonable rate of interest. (FV of $1. PV of $1. EVA of $1. PVA of $1. FVAD of $1 and PVAD.0f $1) (Use appropriate factor(s) from the tables provided.) Required: 1-a. Complete the table below to determine the price of the equipment 1-b. Prepare the journal entry on January 1, 2021, for Amber Mining and Milling's purchase of the lathe. 2. Prepare an amortization schedule for the three-year term of the note 3. Prepare the journal entries to record (a) Interest for each of the three years and (b) payment of the note at maturity. Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 2 Reg 3 Complete the table below to determine the price of the equipment. (Round final answers to the nearest whole dollar) Table Values are based on Present Value Cash Flow Amount Interest Principal Price of equipment
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