Question

On October 30, 2016, Sanchez Company acquired a piece of machinery and signed a 12-month note for $24,000. The face value of the note includes the price of the machinery and interest. The note is to be paid in four $6,000 quarterly installments. The value of the machinery is the present value of the four quarterly payments discounted at an annual interest rate of 16%.

Required:

1.	Prepare all the journal entries required to record the preceding information including the year-end adjusting entry and any payments. Present value techniques should be used.
2.	Show how the preceding items would be reported on the December 31, 2016, balance sheet.

CHART OF ACCOUNTS
Sanchez Company
General Ledger
ASSETS 111 Cash 121 Accounts Receivable 141 Inventory 152 Prepaid Insurance 181 Machine 189 Accumulated Depreciation LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 260 Notes Payable 261 Discount on Notes Payable 265 Income Taxes Payable EQUITY 311 Common Stock 331 Retained Earnings	REVENUE 411 Sales Revenue EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense 521 Salaries Expense 532 Bad Debt Expense 540 Interest Expense 541 Depreciation Expense 559 Miscellaneous Expenses 910 Income Tax Expense

Prepare all the journal entries required to record the information given including the year-end adjusting entry and any payments. Payments are made at month-end on January 31, April 30, July 31 and October 31. Present value techniques should be used.

PAGE 9

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21

Show how the items would be reported on the December 31, 2016, balance sheet. Additional Instructions

Sanchez Company

Partial Balance Statement

December 31, 2016

1	Property, Plant, and Equipment:
2
3	Current Liabilities:
4
5

fn,i=(1 + i)n

n	1.5%	4.0%	4.5%	5.0%	5.5%	6.0%	7.0%	8.0%	9.0%	10.0%	12.0%	14.0%	16.0%	18.0%
1	1.015000	1.040000	1.045000	1.050000	1.055000	1.060000	1.070000	1.080000	1.090000	1.100000	1.120000	1.140000	1.160000	1.180000
2	1.030225	1.081600	1.092025	1.102500	1.113025	1.123600	1.144900	1.166400	1.188100	1.210000	1.254400	1.299600	1.345600	1.392400
3	1.045678	1.124864	1.141166	1.157625	1.174241	1.191016	1.225043	1.259712	1.295029	1.331000	1.404928	1.481544	1.560896	1.643032
4	1.061364	1.169859	1.192519	1.215506	1.238825	1.262477	1.310796	1.360489	1.411582	1.464100	1.573519	1.688960	1.810639	1.938778
5	1.077284	1.216653	1.246182	1.276282	1.306960	1.338226	1.402552	1.469328	1.538624	1.610510	1.762342	1.925415	2.100342	2.287758
6	1.093443	1.265319	1.302260	1.340096	1.378843	1.418519	1.500730	1.586874	1.677100	1.771561	1.973823	2.194973	2.436396	2.699554
7	1.109845	1.315932	1.360862	1.407100	1.454679	1.503630	1.605781	1.713824	1.828039	1.948717	2.210681	2.502269	2.826220	3.185474
8	1.126493	1.368569	1.422101	1.477455	1.534687	1.593848	1.718186	1.850930	1.992563	2.143589	2.475963	2.852586	3.278415	3.758859
9	1.143390	1.423312	1.486095	1.551328	1.619094	1.689479	1.838459	1.999005	2.171893	2.357948	2.773079	3.251949	3.802961	4.435454
10	1.160541	1.480244	1.552969	1.628895	1.708144	1.790848	1.967151	2.158925	2.367364	2.593742	3.105848	3.707221	4.411435	5.233836
11	1.177949	1.539454	1.622853	1.710339	1.802092	1.898299	2.104852	2.331639	2.580426	2.853117	3.478550	4.226232	5.117265	6.175926
12	1.195618	1.601032	1.695881	1.795856	1.901207	2.012196	2.252192	2.518170	2.812665	3.138428	3.895976	4.817905	5.936027	7.287593
13	1.213552	1.665074	1.772196	1.885649	2.005774	2.132928	2.409845	2.719624	3.065805	3.452271	4.363493	5.492411	6.885791	8.599359
14	1.231756	1.731676	1.851945	1.979932	2.116091	2.260904	2.578534	2.937194	3.341727	3.797498	4.887112	6.261349	7.987518	10.147244
15	1.250232	1.800944	1.935282	2.078928	2.232476	2.396558	2.759032	3.172169	3.642482	4.177248	5.473566	7.137938	9.265521	11.973748
16	1.268986	1.872981	2.022370	2.182875	2.355263	2.540352	2.952164	3.425943	3.970306	4.594973	6.130394	8.137249	10.748004	14.129023
17	1.288020	1.947900	2.113377	2.292021	2.484802	2.692773	3.158815	3.700018	4.327633	5.054470	6.866041	9.276464	12.467685	16.672247
18	1.307341	2.025817	2.208479	2.406619	2.621466	2.854339	3.379932	3.996019	4.717120	5.559917	7.689966	10.575169	14.462514	19.673251
19	1.326951	2.106849	2.307860	2.526950	2.765647	3.025600	3.616528	4.315701	5.141661	6.115909	8.612762	12.055693	16.776517	23.214436
20	1.346855	2.191123	2.411714	2.653298	2.917757	3.207135	3.869684	4.660957	5.604411	6.727500	9.646293	13.743490	19.460759	27.393035
21	1.367058	2.278768	2.520241	2.785963	3.078234	3.399564	4.140562	5.033834	6.108808	7.400250	10.803848	15.667578	22.574481	32.323781
22	1.387564	2.369919	2.633652	2.925261	3.247537	3.603537	4.430402	5.436540	6.658600	8.140275	12.100310	17.861039	26.186398	38.142061
23	1.408377	2.464716	2.752166	3.071524	3.426152	3.819750	4.740530	5.871464	7.257874	8.954302	13.552347	20.361585	30.376222	45.007632
24	1.429503	2.563304	2.876014	3.225100	3.614590	4.048935	5.072367	6.341181	7.911083	9.849733	15.178629	23.212207	35.236417	53.109006
25	1.450945	2.665836	3.005434	3.386355	3.813392	4.291871	5.427433	6.848475	8.623081	10.834706	17.000064	26.461916	40.874244	62.668627
26	1.472710	2.772470	3.140679	3.555673	4.023129	4.549383	5.807353	7.396353	9.399158	11.918177	19.040072	30.166584	47.414123	73.948980
27	1.494800	2.883369	3.282013	3.733456	4.244401	4.822346	6.213868	7.988061	10.245082	13.109994	21.324881	34.389906	55.000382	87.259797
28	1.517222	2.998703	3.429700	3.920159	4.477843	5.111687	6.648838	8.627106	11.167140	14.420994	23.883866	39.204493	63.800444	102.966560
29	1.539981	3.118651	3.584036	4.116136	4.724124	5.418388	7.114257	9.317275	12.172182	15.863093	26.749930	44.693122	74.008515	121.500541
30	1.563080	3.243398	3.745318	4.321942	4.983951	5.743491	7.612255	10.062657	13.267678	17.449402	29.959922	50.950159	85.849877	143.370638

FO,n,i=(1 + i)n−1i

n	1.5%	4.0%	4.5%	5.0%	5.5%	6.0%	7.0%	8.0%	9.0%	10.0%	12.0%	14.0%	16.0%	18.0%
1	1.000000	1.000000	1.000000	1.000000	1.000000	1.000000	1.000000	1.000000	1.000000	1.000000	1.000000	1.000000	1.000000	1.000000
2	2.015000	2.040000	2.045000	2.050000	2.055000	2.060000	2.070000	2.080000	2.090000	2.100000	2.120000	2.140000	2.160000	2.180000
3	3.045225	3.121600	3.137025	3.152500	3.168025	3.183600	3.214900	3.246400	3.278100	3.310000	3.374400	3.439600	3.505600	3.572400
4	4.090903	4.246464	4.278191	4.310125	4.342266	4.374616	4.439943	4.506112	4.573129	4.641000	4.779328	4.921144	5.066496	5.215432
5	5.152267	5.416323	5.470710	5.525631	5.581091	5.637093	5.750739	5.866601	5.984711	6.105100	6.352847	6.610104	6.877135	7.154210
6	6.229551	6.632975	6.716892	6.801913	6.888051	6.975319	7.153291	7.335929	7.523335	7.715610	8.115189	8.535519	8.977477	9.441968
7	7.322994	7.898294	8.019152	8.142011	8.266894	8.393838	8.654021	8.922803	9.200735	9.487171	10.089012	10.730491	11.413873	12.141522
8	8.432839	9.214226	9.380014	9.549109	9.721573	9.897468	10.259803	10.636628	11.028474	11.435888	12.299693	13.232760	14.240093	15.326996
9	9.559332	10.582795	10.802114	11.026564	11.256260	11.491316	11.977989	12.487558	13.021036	13.579477	14.775656	16.085347	17.518508	19.085855
10	10.702722	12.006107	12.288209	12.577893	12.875354	13.180795	13.816448	14.486562	15.192930	15.937425	17.548735	19.337295	21.321469	23.521309
11	11.863262	13.486351	13.841179	14.206787	14.583498	14.971643	15.783599	16.645487	17.560293	18.531167	20.654583	23.044516	25.732904	28.755144
12	13.041211	15.025805	15.464032	15.917127	16.385591	16.869941	17.888451	18.977126	20.140720	21.384284	24.133133	27.270749	30.850169	34.931070
13	14.236830	16.626838	17.159913	17.712983	18.286798	18.882138	20.140643	21.495297	22.953385	24.522712	28.029109	32.088654	36.786196	42.218663
14	15.450382	18.291911	18.932109	19.598632	20.292572	21.015066	22.550488	24.214920	26.019189	27.974983	32.392602	37.581065	43.671987	50.818022
15	16.682138	20.023588	20.784054	21.578564	22.408663	23.275970	25.129022	27.152114	29.360916	31.772482	37.279715	43.842414	51.659505	60.965266
16	17.932370	21.824531	22.719337	23.657492	24.641140	25.672528	27.888054	30.324283	33.003399	35.949730	42.753280	50.980352	60.925026	72.939014
17	19.201655	23.697512	24.741707	25.840366	26.996403	28.212880	30.840217	33.750226	36.973705	40.544703	48.883674	59.117601	71.673030	87.068036
18	20.489376	25.645413	26.855084	28.132385	29.481205	30.905653	33.999033	37.450244	41.301338	45.599173	55.749715	68.394066	84.140715	103.740283
19	21.796716	27.671229	29.063562	30.539004	32.102671	33.759992	37.378965	41.446263	46.018458	51.159090	63.439681	78.969235	98.603230	123.413534
20	23.123667	29.778079	31.371423	33.065954	34.868318	36.785591	40.995492	45.761964	51.160120	57.274999	72.052442	91.024928	115.379747	146.627970
21	24.470522	31.969202	33.783137	35.719252	37.786076	39.992727	44.865177	50.422921	56.764530	64.002499	81.698736	104.768418	134.840506	174.021005
22	25.837580	34.247970	36.303378	38.505214	40.864310	43.392290	49.005739	55.456755	62.873338	71.402749	92.502584	120.435996	157.414987	206.344785
23	27.225144	36.617889	38.937030	41.430475	44.111847	46.995828	53.436141	60.893296	69.531939	79.543024	104.602894	138.297035	183.601385	244.486847
24	28.633521	39.082604	41.689196	44.501999	47.537998	50.815577	58.176671	66.764759	76.789813	88.497327	118.155241	158.658620	213.977607	289.494479
25	30.063024	41.645908	44.565210	47.727099	51.152588	54.864512	63.249038	73.105940	84.700896	98.347059	133.333870	181.870827	249.214024	342.603486
26	31.513969	44.311745	47.570645	51.113454	54.965981	59.156383	68.676470	79.954415	93.323977	109.181765	150.333934	208.332743	290.088267	405.272113
27	32.986678	47.084214	50.711324	54.669126	58.989109	63.705766	74.483823	87.350768	102.723135	121.099942	169.374007	238.499327	337.502390	479.221093
28	34.481479	49.967583	53.993333	58.402583	63.233510	68.528112	80.697691	95.338830	112.968217	134.209936	190.698887	272.889233	392.502773	566.480890
29	35.998701	52.966286	57.423033	62.322712	67.711354	73.639798	87.346529	103.965936	124.135356	148.630930	214.582754	312.093725	456.303216	669.447450
30	37.538681	56.084938	61.007070	66.438848	72.435478	79.058186	94.460786	113.283211	136.307539	164.494023	241.332684	356.786847	530.311731	790.947991

pn,i=1(1 + i)n

n	1.5%	4.0%	4.5%	5.0%	5.5%	6.0%	7.0%	8.0%	9.0%	10.0%	12.0%	14.0%	16.0%	18.0%
1	0.985222	0.961538	0.956938	0.952381	0.947867	0.943396	0.934579	0.925926	0.917431	0.909091	0.892857	0.877193	0.862069	0.847458
2	0.970662	0.924556	0.915730	0.907029	0.898452	0.889996	0.873439	0.857339	0.841680	0.826446	0.797194	0.769468	0.743163	0.718184
3	0.956317	0.888996	0.876297	0.863838	0.851614	0.839619	0.816298	0.793832	0.772183	0.751315	0.711780	0.674972	0.640658	0.608631
4	0.942184	0.854804	0.838561	0.822702	0.807217	0.792094	0.762895	0.735030	0.708425	0.683013	0.635518	0.592080	0.552291	0.515789
5	0.928260	0.821927	0.802451	0.783526	0.765134	0.747258	0.712986	0.680583	0.649931	0.620921	0.567427	0.519369	0.476113	0.437109
6	0.914542	0.790315	0.767896	0.746215	0.725246	0.704961	0.666342	0.630170	0.596267	0.564474	0.506631	0.455587	0.410442	0.370432
7	0.901027	0.759918	0.734828	0.710681	0.687437	0.665057	0.622750	0.583490	0.547034	0.513158	0.452349	0.399637	0.353830	0.313925
8	0.887711	0.730690	0.703185	0.676839	0.651599	0.627412	0.582012	0.540269	0.501866	0.466507	0.403883	0.350559	0.305025	0.266038
9	0.874592	0.702587	0.672904	0.644609	0.617629	0.591898	0.543934	0.500249	0.460428	0.424098	0.360610	0.307508	0.262953	0.225456
10	0.861667	0.675564	0.643928	0.613913	0.585431	0.558395	0.508349	0.463193	0.422411	0.385543	0.321973	0.269744	0.226684	0.191064
11	0.848933	0.649581	0.616199	0.584679	0.554911	0.526788	0.475093	0.428883	0.387533	0.350494	0.287476	0.236617	0.195417	0.161919
12	0.836387	0.624597	0.589664	0.556837	0.525982	0.496969	0.444012	0.397114	0.355535	0.318631	0.256675	0.207559	0.168463	0.137220
13	0.824027	0.600574	0.564272	0.530321	0.498561	0.468839	0.414964	0.367698	0.326179	0.289664	0.229174	0.182069	0.145227	0.116288
14	0.811849	0.577475	0.539973	0.505068	0.472569	0.442301	0.387817	0.340461	0.299246	0.263331	0.204620	0.159710	0.125195	0.098549
15	0.799852	0.555265	0.516720	0.481017	0.447933	0.417265	0.362446	0.315242	0.274538	0.239392	0.182696	0.140096	0.107927	0.083516
16	0.788031	0.533908	0.494469	0.458112	0.424581	0.393646	0.338735	0.291890	0.251870	0.217629	0.163122	0.122892	0.093041	0.070776
17	0.776385	0.513373	0.473176	0.436297	0.402447	0.371364	0.316574	0.270269	0.231073	0.197845	0.145644	0.107800	0.080207	0.059980
18	0.764912	0.493628	0.452800	0.415521	0.381466	0.350344	0.295864	0.250249	0.211994	0.179859	0.130040	0.094561	0.069144	0.050830
19	0.753607	0.474642	0.433302	0.395734	0.361579	0.330513	0.276508	0.231712	0.194490	0.163508	0.116107	0.082948	0.059607	0.043077
20	0.742470	0.456387	0.414643	0.376889	0.342729	0.311805	0.258419	0.214548	0.178431	0.148644	0.103667	0.072762	0.051385	0.036506
21	0.731498	0.438834	0.396787	0.358942	0.324862	0.294155	0.241513	0.198656	0.163698	0.135131	0.092560	0.063826	0.044298	0.030937
22	0.720688	0.421955	0.379701	0.341850	0.307926	0.277505	0.225713	0.183941	0.150182	0.122846	0.082643	0.055988	0.038188	0.026218
23	0.710037	0.405726	0.363350	0.325571	0.291873	0.261797	0.210947	0.170315	0.137781	0.111678	0.073788	0.049112	0.032920	0.022218
24	0.699544	0.390121	0.347703	0.310068	0.276657	0.246979	0.197147	0.157699	0.126405	0.101526	0.065882	0.043081	0.028380	0.018829
25	0.689206	0.375117	0.332731	0.295303	0.262234	0.232999	0.184249	0.146018	0.115968	0.092296	0.058823	0.037790	0.024465	0.015957
26	0.679021	0.360689	0.318402	0.281241	0.248563	0.219810	0.172195	0.135202	0.106393	0.083905	0.052521	0.033149	0.021091	0.013523
27	0.668986	0.346817	0.304691	0.267848	0.235605	0.207368	0.160930	0.125187	0.097608	0.076278	0.046894	0.029078	0.018182	0.011460
28	0.659099	0.333477	0.291571	0.255094	0.223322	0.195630	0.150402	0.115914	0.089548	0.069343	0.041869	0.025507	0.015674	0.009712
29	0.649359	0.320651	0.279015	0.242946	0.211679	0.184557	0.140563	0.107328	0.082155	0.063039	0.037383	0.022375	0.013512	0.008230
30	0.639762	0.308319	0.267000	0.231377	0.200944	0.174110	0.131367	0.099377	0.075371	0.057309	0.033378	0.019627	0.011648	0.006975

pO,n,i=1−1(1 + i)ni

n	1.5%	4.0%	4.5%	5.0%	5.5%	6.0%	7.0%	8.0%	9.0%	10.0%	12.0%	14.0%	16.0%	18.0%
1	0.985222	0.961538	0.956938	0.952381	0.947867	0.943396	0.934579	0.925926	0.917431	0.909091	0.892857	0.877193	0.862069	0.847458
2	1.955883	1.886095	1.872668	1.859410	1.846320	1.833393	1.808018	1.783265	1.759111	1.735537	1.690051	1.646661	1.605232	1.565642
3	2.912200	2.775091	2.748964	2.723248	2.697933	2.673012	2.624316	2.577097	2.531295	2.486852	2.401831	2.321632	2.245890	2.174273
4	3.854385	3.629895	3.587526	3.545951	3.505150	3.465106	3.387211	3.312127	3.239720	3.169865	3.037349	2.913712	2.798181	2.690062
5	4.782645	4.451822	4.389977	4.329477	4.270284	4.212364	4.100197	3.992710	3.889651	3.790787	3.604776	3.433081	3.274294	3.127171
6	5.697187	5.242137	5.157872	5.075692	4.995530	4.917324	4.766540	4.622880	4.485919	4.355261	4.111407	3.888668	3.684736	3.497603
7	6.598214	6.002055	5.892701	5.786373	5.682967	5.582381	5.389289	5.206370	5.032953	4.868419	4.563757	4.288305	4.038565	3.811528
8	7.485925	6.732745	6.595886	6.463213	6.334566	6.209794	5.971299	5.746639	5.534819	5.334926	4.967640	4.638864	4.343591	4.077566
9	8.360517	7.435332	7.268790	7.107822	6.952195	6.801692	6.515232	6.246888	5.995247	5.759024	5.328250	4.946372	4.606544	4.303022
10	9.222185	8.110896	7.912718	7.721735	7.537626	7.360087	7.023582	6.710081	6.417658	6.144567	5.650223	5.216116	4.833227	4.494086
11	10.071118	8.760477	8.528917	8.306414	8.092536	7.886875	7.498674	7.138964	6.805191	6.495061	5.937699	5.452733	5.028644	4.656005
12	10.907505	9.385074	9.118581	8.863252	8.618518	8.383844	7.942686	7.536078	7.160725	6.813692	6.194374	5.660292	5.197107	4.793225
13	11.731532	9.985648	9.682852	9.393573	9.117079	8.852683	8.357651	7.903776	7.486904	7.103356	6.423548	5.842362	5.342334	4.909513
14	12.543382	10.563123	10.222825	9.898641	9.589648	9.294984	8.745468	8.244237	7.786150	7.366687	6.628168	6.002072	5.467529	5.008062
15	13.343233	11.118387	10.739546	10.379658	10.037581	9.712249	9.107914	8.559479	8.060688	7.606080	6.810864	6.142168	5.575456	5.091578
16	14.131264	11.652296	11.234015	10.837770	10.462162	10.105895	9.446649	8.851369	8.312558	7.823709	6.973986	6.265060	5.668497	5.162354
17	14.907649	12.165669	11.707191	11.274066	10.864609	10.477260	9.763223	9.121638	8.543631	8.021553	7.119630	6.372859	5.748704	5.222334
18	15.672561	12.659297	12.159992	11.689587	11.246074	10.827603	10.059087	9.371887	8.755625	8.201712	7.249670	6.467420	5.817848	5.273164
19	16.426168	13.133939	12.593294	12.085321	11.607654	11.158116	10.335595	9.603599	8.950115	8.364920	7.365777	6.550369	5.877455	5.316241
20	17.168639	13.590326	13.007936	12.462210	11.950382	11.469921	10.594014	9.818147	9.128546	8.513564	7.469444	6.623131	5.928841	5.352746
21	17.900137	14.029160	13.404724	12.821153	12.275244	11.764077	10.835527	10.016803	9.292244	8.648694	7.562006	6.686957	5.973139	5.383683
22	18.620824	14.451115	13.784425	13.163003	12.583170	12.041582	11.061240	10.201044	9.442425	8.771540	7.644646	6.742944	6.011326	5.409901
23	19.330861	14.856842	14.147775	13.488574	12.875042	12.303379	11.272187	10.371059	9.580207	8.883218	7.718434	6.792056	6.044247	5.432120
24	20.030405	15.246963	14.495478	13.798642	13.151699	12.550358	11.469334	10.528758	9.706612	8.984744	7.784316	6.835137	6.072627	5.450949
25	20.719611	15.622080	14.828209	14.093945	13.413933	12.783356	11.653583	10.674776	9.822580	9.077040	7.843139	6.872927	6.097092	5.466906
26	21.398632	15.982769	15.146611	14.375185	13.662495	13.003166	11.825779	10.809978	9.928972	9.160945	7.895660	6.906077	6.118183	5.480429
27	22.067617	16.329586	15.451303	14.643034	13.898100	13.210534	11.986709	10.935165	10.026580	9.237223	7.942554	6.935155	6.136364	5.491889
28	22.726717	16.663063	15.742874	14.898127	14.121422	13.406164	12.137111	11.051078	10.116128	9.306567	7.984423	6.960662	6.152038	5.501601
29	23.376076	16.983715	16.021889	15.141074	14.333101	13.590721	12.277674	11.158406	10.198283	9.369606	8.021806	6.983037	6.165550	5.509831
30	24.015838	17.292033	16.288889	15.372451	14.533745	13.764831	12.409041	11.257783	10.273654	9.426914	8.055184	7.002664	6.177198	5.516806

pD,n,i=1−1(1 + i)n-1i+1

n	1.5%	4.0%	4.5%	5.0%	5.5%	6.0%	7.0%	8.0%	9.0%	10.0%	12.0%	14.0%	16.0%	18.0%
1	1.000000	1.000000	1.000000	1.000000	1.000000	1.000000	1.000000	1.000000	1.000000	1.000000	1.000000	1.000000	1.000000	1.000000
2	1.985222	1.961538	1.956938	1.952381	1.947867	1.943396	1.934579	1.925926	1.917431	1.909091	1.892857	1.877193	1.862069	1.847458
3	2.955883	2.886095	2.872668	2.859410	2.846320	2.833393	2.808018	2.783265	2.759111	2.735537	2.690051	2.646661	2.605232	2.565642
4	3.912200	3.775091	3.748964	3.723248	3.697933	3.673012	3.624316	3.577097	3.531295	3.486852	3.401831	3.321632	3.245890	3.174273
5	4.854385	4.629895	4.587526	4.545951	4.505150	4.465106	4.387211	4.312127	4.239720	4.169865	4.037349	3.913712	3.798181	3.690062
6	5.782645	5.451822	5.389977	5.329477	5.270284	5.212364	5.100197	4.992710	4.889651	4.790787	4.604776	4.433081	4.274294	4.127171
7	6.697187	6.242137	6.157872	6.075692	5.995530	5.917324	5.766540	5.622880	5.485919	5.355261	5.111407	4.888668	4.684736	4.497603
8	7.598214	7.002055	6.892701	6.786373	6.682967	6.582381	6.389289	6.206370	6.032953	5.868419	5.563757	5.288305	5.038565	4.811528
9	8.485925	7.732745	7.595886	7.463213	7.334566	7.209794	6.971299	6.746639	6.534819	6.334926	5.967640	5.638864	5.343591	5.077566
10	9.360517	8.435332	8.268790	8.107822	7.952195	7.801692	7.515232	7.246888	6.995247	6.759024	6.328250	5.946372	5.606544	5.303022
11	10.222185	9.110896	8.912718	8.721735	8.537626	8.360087	8.023582	7.710081	7.417658	7.144567	6.650223	6.216116	5.833227	5.494086
12	11.071118	9.760477	9.528917	9.306414	9.092536	8.886875	8.498674	8.138964	7.805191	7.495061	6.937699	6.452733	6.028644	5.656005
13	11.907505	10.385074	10.118581	9.863252	9.618518	9.383844	8.942686	8.536078	8.160725	7.813692	7.194374	6.660292	6.197107	5.793225
14	12.731532	10.985648	10.682852	10.393573	10.117079	9.852683	9.357651	8.903776	8.486904	8.103356	7.423548	6.842362	6.342334	5.909513
15	13.543382	11.563123	11.222825	10.898641	10.589648	10.294984	9.745468	9.244237	8.786150	8.366687	7.628168	7.002072	6.467529	6.008062
16	14.343233	12.118387	11.739546	11.379658	11.037581	10.712249	10.107914	9.559479	9.060688	8.606080	7.810864	7.142168	6.575456	6.091578
17	15.131264	12.652296	12.234015	11.837770	11.462162	11.105895	10.446649	9.851369	9.312558	8.823709	7.973986	7.265060	6.668497	6.162354
18	15.907649	13.165669	12.707191	12.274066	11.864609	11.477260	10.763223	10.121638	9.543631	9.021553	8.119630	7.372859	6.748704	6.222334
19	16.672561	13.659297	13.159992	12.689587	12.246074	11.827603	11.059087	10.371887	9.755625	9.201712	8.249670	7.467420	6.817848	6.273164
20	17.426168	14.133939	13.593294	13.085321	12.607654	12.158116	11.335595	10.603599	9.950115	9.364920	8.365777	7.550369	6.877455	6.316241
21	18.168639	14.590326	14.007936	13.462210	12.950382	12.469921	11.594014	10.818147	10.128546	9.513564	8.469444	7.623131	6.928841	6.352746
22	18.900137	15.029160	14.404724	13.821153	13.275244	12.764077	11.835527	11.016803	10.292244	9.648694	8.562006	7.686957	6.973139	6.383683
23	19.620824	15.451115	14.784425	14.163003	13.583170	13.041582	12.061240	11.201044	10.442425	9.771540	8.644646	7.742944	7.011326	6.409901
24	20.330861	15.856842	15.147775	14.488574	13.875042	13.303379	12.272187	11.371059	10.580207	9.883218	8.718434	7.792056	7.044247	6.432120
25	21.030405	16.246963	15.495478	14.798642	14.151699	13.550358	12.469334	11.528758	10.706612	9.984744	8.784316	7.835137	7.072627	6.450949
26	21.719611	16.622080	15.828209	15.093945	14.413933	13.783356	12.653583	11.674776	10.822580	10.077040	8.843139	7.872927	7.097092	6.466906
27	22.398632	16.982769	16.146611	15.375185	14.662495	14.003166	12.825779	11.809978	10.928972	10.160945	8.895660	7.906077	7.118183	6.480429
28	23.067617	17.329586	16.451303	15.643034	14.898100	14.210534	12.986709	11.935165	11.026580	10.237223	8.942554	7.935155	7.136364	6.491889
29	23.726717	17.663063	16.742874	15.898127	15.121422	14.406164	13.137111	12.051078	11.116128	10.306567	8.984423	7.960662	7.152038	6.501601
30	24.376076	17.983715	17.021889	16.141074	15.333101	14.590721	13.277674	12.158406	11.198283	10.369606	9.021806	7.983037	7.165550	6.509831

Answer 1

signed a 12-month note for $24,000.

quarterly installments =$6,000

Interest rate =16%

So if we look in to the table then PV of Annuity 1=3.629895

So the present value

= 6000*3.629895

=21,779.37

Now we will prepare the Schedule of Interest Expense and Obligation Reduction as under

	Payment	4% Quarterly Interest	Reduction Obligation	Net Reduction
31-Oct				21779.37
31-Jan	6000	871.2	5128.8	16650.5
30-Apr	6000	666.02	5334.0	11316.6
31-Jul	6000	452.66	5547.3	5769.2
31-Oct	6000	230.78	5769.2	0.0
	24000	2220.628426	21779.3716

Now we pass the journal Entry as under

Date	Description	Debit $	Credit $
30-Oct	Machine	21779.37
	Discount on Notes Payable	2220.63
	Notes Payable		24000
31-Dec	Interest Expense (21779.37*16%*2/12)	580.78
	Discount on Notes Payable		580.78
31-Jan	Interest Expense	290.39
	Notes Payable	6000
	Discount on Notes Payable		290.39
	Cash		6000
30-Apr	Interest Expense	662.02
	Notes Payable	6000
	Discount on Notes Payable		662.02
	Cash		6000
31-Jul	Interest Expense	452.66
	Notes Payable	6000
	Discount on Notes Payable		452.66
	Cash		6000
31-Oct	Interest Expense	230.78
	Notes Payable	6000
	Discount on Notes Payable		230.78
	Cash		6000

Balance Sheet
Current Liabilities
Notes Payable	24000
Less Discount on Notes Payable	-1639.85	22360.15
(2220.63-580.78)
Property Plant and Equipment
Machinery		21779.38