American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2018. In payment for the $4 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 10%.

Required:
a. Prepare the journal entry for American Food Services’ purchase of the machine on January 1, 2011.
b. Prepare an amortization schedule for the four-year term of the installment note.
c. Prepare the journal entry for the first installment payment on December 31, 2011.
d. Prepare the journal entry for the third installment payment on December 31, 2013.

Exercise 12-7 shown below are comparative balance sheets for flint corporation. flint corporation comparative balance sheets december 31 assets 2017 2016 cash $ 201,348 $ 65,142 accounts receivable 260,568 225,036 inventory 494,487 559,629 land 236,880 296,100 equipment 769,860 592,200 accumulated depreciation—equipment (195,426 ) (94,752 ) total $1,767,717 $1,643,355 liabilities and stockholders’ equity accounts payable $ 115,479 $ 127,323 bonds payable 444,150 592,200 common stock ($1 par) 639,576 515,214 retained earnings 568,512 408,618 total $1,767,717 $1,643,355 additional information: 1. net income for 2017 was $275,373. 2. depreciation expense was $100,674. 3. cash dividends of $115,479 were declared and paid. 4. bonds payable amounting to $148,050 were redeemed for cash $148,050. 5. common stock was issued for $124,362 cash. 6. no equipment was sold during 2017. 7. land was sold for its book value. prepare a statement of cash flows for 2017 using the indirect method.