American Food Services, Inc., acquired a packaging machine from Barton and Barto

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, 2016 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% PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) (A/ of$1. PVOSI FVA of $1 Required: 1. Prepare the journal entry for American Food Services purchase of the machine on January 1, 2016 (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) list Journal entry worksheet Record the purchase of the machine on January 1, 2016 Date General Journal Debit Credit January 01, 2016 Record entry

Explanation / Answer

1) Journal Entry :-

2) Amortization Schedule :-

PMT = PMT(Rate,nper,pv,fv)

= PMT(12%,4,-4800000,0)

= $1580325

3) Journal Entry of first Installment Payment on Dec. 31, 2016

4) Journal Entry on Dec. 31, 2018 :-

Date Particulars Debit($) Credit($) Jan 1 Machinery A/c Dr. 4800000 To B And B Corporation A/c 4800000

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