Question

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 $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 17% EVOLI PVS1 EVA of $1 PVA of S1 EVAD S1 and PVAD LSD (Use appropriate factor(s) from the tables provided.) 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 Complete this question by entering your answers in the tabs below. Prepare an amortization schedule for the four year term of the installment note. (Enter your answers in whole dollars.) Dec 31 Cash P et Decrease in Outstanding arch

Answer 1

Answe Nobes Payable when an organisation is not having a sufficlent Goth for purchase of anything they will accot q_ashes-fougallo fcorg the owner of asset. This will helpful them to use Asset and continue the operations By getting such_noles payable, the acquiren_of will have to pay installments with iglevest in outlegung I balance of asset Le Journal Enky for American Fool Sevises, purchase_s$_machine on January 1, 2021 American Food Services Joying! Énby for purchase of Machine Date | Jagl. 2021 1548079 Particulars Joctjt ) care Machinery Al- Or. 540DEDO To Notest Payable (Barton) Al 1 Being machinery acquired _ signed a four year notes payable ) 5400010 (5469000 3. Amoihzation schedule for four year installment role for making amortization schrtyle, we will have to first know the monthly installment payment at the end of year to calculate the interest and oncipal portion of monthly installasat_payment

Monthly Installment Payment - a cost of Notes Payable Sym (PV of 11% for 4 years) $ 5400.000 ' (1.11) 4 yeous $ 5400000 3.10 245 $1740562 Amejiqh Food Services Schedule of Amortination of Notes Payable Dale Cash Payment Effective Inlevest Desicose in Bylance outstanding Bylance Dec.3) 5400ooo 2021 2002 174056 h 1740562 _1740562 -1.740562 2013 594000 467878 327883 172488 1146562 ! 1272684 1412679 11568075 4253438 2980754 1568075 Nil 2024

-3. Joying!_Enly_for_first_instyment-mayment on December 31, 2017 weiling American fool Seovlic Journal Envy for fjust inslyllment Date w Pubi illeur Debit (1) Dec.31 | Noter payable - Buton Ale - 1 146562 2011 Interest Expense Ala -Ov. $94000 - To Cash Ale (Being to record Fusik igsityUmeal_payment- I with interest 1740562 Total 174056 [1740562 4 Точил / Envy veco third leql-e payment o0) Decembes 3) Ameulan_[ool Sewu ceo Journal Entry for Third Installment cuelit ] | Debit-($ low D. 14/2679 on 327883_ Date I Particulary Decal Notes Payable - Barton Ale 1 2025 Tn tevest Fxpenje Alat To Cash Alam (Being to record third installment teyment with in bewert) 1740562 1740562 1760562