Question

Reg 2 Reg 1 3 and 4 Prepare the journal entries for American Food Services' purchase of the machine on January 1, 2021, the first installment payment on December 31, 2021 and the third installment payment on December 31, 2023. (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.) View transaction list Journal entry worksheet < 1 2 3 > Record the third installment payment on December 31, 2023. Note: Enter debits before credits. Date General Journal Debit Credit December 31, 2023 Record entry Clear entry View general journal < Reg 2 Reg 1 3 and 4 >

Answer 1

Credit Solution 1 Journal Entries in the books of American Food Services Date General Journal Debit 01-01-2021 Machine $ 40,00,000 Note Payable (To record purchase of Machine and issue of Note) $40,00,000 Outstanding Balance PV of Annuity ( 10%, 4 years) Annual Installment ( $4,000,000 / 3.16987) $ 40,00,000 3.16987 $ 12,61,881 Solution 2) Period End 2021 Amortization Schedule Cash Effective Decrease in Outstandin Payment Interest Balance g Balance $ 40,00,000 $ 12,61,881 $ 4,00,000 $ 8,61,881 $ 31,38,119 $ 12,61,881 $ 3,13,812 $ 9,48,070 $ 21,90,049 $ 12,61,881 $ 2,19,005 $ 10,42,876 $ 11,47,173 $ 12,61,881 $ 1,14,709 $ 11,47,172 $ 0 $ 50,47,526 $ 10,47,526 $ 40,00,000 2022 2023 2024 Credit Solution 3 Date General Journal 31-12-2021 Interest Expense Note Payable Cash (To record the first Installment payment) Debit $ 4,00,000 $ 8,61,881 $ 12,61,881 Credit Solution 4 Date General Journal 31-12-2023 Interest Expense Note Payable Cash (To record the third Installment payment) Debit $ 2,19,005 $ 10,42,876 $12,61,881

In case of any doubts or issues, please do comment below