Gillis Tech. Inc., constructed for A&G Warehousers that was completed and ready for use on January 1, 2018. A&G paid for the conveyers by issuing $100,000, four year note that specified 5% interest to be paid on December 31 of each year, and the note ai to be repaid in full by the end of the four years. The conveyor was custom built for A&G, so its cash price was unknown. By comparisons with similar transaction it was determined that a reasonable interest rate was 10%. (P14-3) WORTH 15 POINTS

REQUIRED:
a. Prepare the journal entry for A&G’s purchase of the conveyor on January 1, 2018.
b. Prepare the amortization schedule for the four-year term of the note.
c. Prepare the journal entry for A&G’s third interest payment on December 31, 2020.