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American Food Services, Incorporated, acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2024. In payment for the $5.4 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 11% Required: 1. Prepare the journal entry for American Food Services' purchase of the machine on January 1, 2024. 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, 2024. 4. Prepare the journal entry for the third installment payment on December 31, 2026. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1)

American Food Services, Incorporated, acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2024. In payment for the $5.4 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 11% Required: 1. Prepare the journal entry for American Food Services' purchase of the machine on January 1, 2024. 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, 2024. 4. Prepare the journal entry for the third installment payment on December 31, 2026. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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American Food Services, Incorporated, acquired a packaging machine from Barton and Barlon Corporation. Barton and Barton completed construction of the machine on January 1, 2024. In payment for the $5.4 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 11%. Required: 1. Prepare the journal entry for American Food Services' purchase of the machine on January 1, 2024. 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, 2024. 4. Prepare the journal entry for the third installment payment on December 31, 2026. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Complete this question by entering your answers in the tabs below. Req 2 Req 13 and 4 Prepare an amortization schedule for the four-year term of the installment note. Note: Round intermediate calculations and final answers to the nearest whole dollar. December 31 Cash Payment Effective Interest Decrease in Balance Outstanding Balance 2024 2025
Transcribed Image Text:American Food Services, Incorporated, acquired a packaging machine from Barton and Barlon Corporation. Barton and Barton completed construction of the machine on January 1, 2024. In payment for the $5.4 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 11%. Required: 1. Prepare the journal entry for American Food Services' purchase of the machine on January 1, 2024. 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, 2024. 4. Prepare the journal entry for the third installment payment on December 31, 2026. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Complete this question by entering your answers in the tabs below. Req 2 Req 13 and 4 Prepare an amortization schedule for the four-year term of the installment note. Note: Round intermediate calculations and final answers to the nearest whole dollar. December 31 Cash Payment Effective Interest Decrease in Balance Outstanding Balance 2024 2025
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