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In: Accounting
Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe. The...
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 $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 $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 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.
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ekkarill92 answered 1 year agoRelated Solutions
Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe. The...
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, 2021. Amber paid for
the lathe by issuing a $600,000, 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 12% was a reasonable rate
of interest.
Note with unrealistic interest rate;...
Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe. The...
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, 2016. Amber paid for the lathe by
issuing a $700,000, 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...
Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe. The...
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 $900,000, three-year note that specified 5%
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 8% was a reasonable rate
of interest. (FV of $1, PV of...
Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe. The...
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, 2021. Amber paid for
the lathe by issuing a $800,000, three-year note that specified 5%
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. (FV of $1, PV of...
Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe. The...
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, 2021. Amber paid for
the lathe by issuing a $720,000, 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 20% was a reasonable rate
of interest. (FV of $1, PV of...
Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe. The...
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 $750,000, 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. (FV of $1, PV of...
Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe. The...
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 $800,000, three-year note that specified 5%
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. (FV of $1, PV of...
Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe. The...
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, 2021. Amber paid for
the lathe by issuing a $500,000, three-year note that specified 5%
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 11% was a reasonable rate
of interest. (FV of $1, PV of...
Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe. The...
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 $750,000, three-year note that specified 3%
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 12% was a reasonable rate
of interest.
Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe. The...
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 $500,000, 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 10% was a reasonable rate
of interest. (FV of $1, PV of...
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