Anxious Company acquired three items of machinery.
* On January 1, 2017, the entity purchased a machine for
500,000 down and four monthly installments of 1,250,000. The cash
price of the machine was 4,700,000.
* On December 31, 2017, the entity purchased a machine in
exchange for a noninterest bearing note requiring ten payments of
500,000.
The first payment was made on December 31, 2018, and the
others are due annually on December 31.
The prevailing rate of interest for this type of note at date
of issuance was 12%.
The present value of an ordinary annuity of 1 at 12% is 5.33
for nine periods and 5.65 for ten periods.
* On December 31, 2017, the entity acquired used machinery by
issuing the seller a two-year, nonintereset bearing note for
3,000,000.
In recent borrowing, the entity has paid a 12% interest for
this type of note.
The present value of 1 at 12% for 2 years is .80 and the
present value of an ordinary annuity of 1 at 12% for 2 years is
1.69
Required:
Prepare journal entries for 2017, 2018 and 2019