60.1K

Verified Solution

Link Copied!

American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. In payment for the $4.8 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 12%. (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.) arded Required: 1. Prepare the journal entry for American Food Services' purchase of the machine on January 1, 2021. 2. Prepare an amortization schedule for the four-year term of the installment note. 3. Prepare the journal entry for the first installment payment on December 31, 2021. 4. Prepare the journal entry for the third installment payment on December 31, 2023 Prepare an amortization schedule for the four-year term of the installment note. (Enter your answers in whole dollars.) Dec.31 Cash Payment Effective Interest Decrease in Balance 2021 2022 2023 2024 1,580,325 1,580,325 1,580,325 1,580,325 6,321,300 576,000 455,481 320,500 4,810,994 6,162,975 1,004,325 1,124,844 1,259,825 3,230,669 158,325 Outstanding Balance 4.800,000 -846,000 -1,970,844 3,230,669 Reg 2 Reg 13 and 4 > *Red text Indicates no response was expected in a cell or a formula-based calculation is incorrect, no points deducted

Answer & Explanation Solved by verified expert

See Answer