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, 2018, Amber paid for the lathe by issuing a $650,000, 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. (Fy of $1 pV of $1, FIA of $1. PVA of S. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) ExAD of Si) Uish sinliar trnccmbr0aion
Required:
1-a. Complete the table below to determine the price of the equipment.
1-b. Prepare the journal entry on January 1, 2018, 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