I need help with this problem. I am just trying to get this long enough to submit. Anyone?Amber Mining and Milling, Inc., contracted with Truax Corpora±on 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 $600,000, three-year note that speciFed 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
transac±ons that 12% was a reasonable rate of interest.
Prepare the journal entry on January 1, 2016, for Truax Corpora±on’s sale of the lathe.
Prepare an amor±za±on schedule for the three-year term of the note.
Prepare the journal entries to record (a) interest for each of the three years and (b) payment of
the note at maturity for Truax.
This question was answered on: Sep 21, 2023
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