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2.00 points Exercise 14-18 Note with unrealistic interest rate; lender; amortization schedule [LO14-3 Amber Mining...

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Accounting

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2.00 points Exercise 14-18 Note with unrealistic interest rate; lender; amortization schedule [LO14-3 Amber Mining and Miling, Inc, oontracted 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 a$750,000, threeyear note t 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. (EyofS1. PyofSI, AAofS1. PVAof$1. BADofS1 and PVAD 0 1) (Use appropriate factor(s) from the tables provided.) 1-a. Complete the below table to prepare the company's journal entry. 2.054 $ 750,000533,835 605,889 Price of machinery 1-b. Prepare the joumal entry on January 1, 2016, for Truax Corporation's sale of the lathe (If no entry s required for a transactionlevent, select "No journal entry required" in the first account field.) View transaction list Vilew journal entry worksheet Date 2016Cash 750,000 605,889 Alowance for 144,111 esc FI 0 F3 FS F7 2 4

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