Question 4 of 7 075 points Amber Mining and Milling Inc cont

Question 4 (of 7) 0.75 points 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, 2016. Amber paid for the lathe by issuing a $600,000, 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 12% was a reasonable rate of interest. (FVofS1. PyoS1. AAofS1, PVA of$1. Fy Dof $1 and PVAD of $1) (Use appropriate factor(s) from the tablos provided.) Required: 1-a. Complete the table below to determine the price of the equipment. values are based on: Amount Present Value Price of equipment 1-b. Prepare the journal entry on January 1, 20 no entry is required for a account field.) 16, for Amber Mining and Milling\'s purchase of the lathe. (Ir transaction/event, select \"No journal entry required in the first 20 8 7 2 3 4 6

Solution

1)a. Price of Equipment :-

1)b. Journal Entry :-

2).

3) Journal Entries :-

Particulars	Amount($)	Factor	Present Value
Interest ($600000*4%)	24000	2.402	$57648
Principal	600000	0.712	$427200
Total			$484848