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Amber Mining and Milling, Inc, contracted with Truax Corporation to have constructed a custom-made lathe....

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Accounting

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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 $900,000, three-year note that speciffed 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 \$1. FVA of \$1, PVA of \$1. EVAD of \$1 and PVAD of \$1) (Use approprlate 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, 2021, 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. Complete this question by entering your answers in the tabs below. Complete the table below to determine the price of the equipment, (Round final answers to the nearest whole dollar.)

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