Barton a American Food Services, Inc,acquired a packaging machine from Barton an

Question

Barton a American Food Services, Inc,acquired a packaging machine from Barton and Barton Corporation. p Barton completed construction of the machine on January 1,2018. In payment for the $4 million machine ican Food Services issued a four-year instalment note to be paid in four equal payments at the end of e The payments include interest at the rate of 10%. Required: 1. Prepare the journal entry for American Food Services' purchase of the machine on January 1, 2018. 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, 2018. 4. Prepare the journal entry for the third installment payment on December 31, 2020. Jyee

Explanation / Answer

Amortization Table

Workings:

I have Used excel to calculate the Instalment:

The Formula is PMT (10% , 4,-4000000)

Date Account Description Debit Credit 1-Jan-18 Machinery $        4,000,000 Note Payable $        4,000,000 (Being Machinery Purchased by Issue of Note)

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