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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 2013 Amber paid for the lathe by

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, 2013. Amber paid for the lathe by issuing a $600,000, three-year note that specified 6% 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 10% was a reasonable rate of interest. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

  

Required:
1.1

Complete the below table to prepare the company's journal entry.

1.2

Prepare the journal entry on January 1, 2013, for Amber Mining and MillingAc€?cs purchase of the lathe

Prepare an amortization schedule for the three-year term of the note.

Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity

Jun 24 2020 View more View Less

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