On January 1, 2014, Peg, Inc Required:
Prepare the Journal Entries Necessary on January 1, 2014

Essay

On January 1, 2014, Peg, Inc. bought some equipment by signing a non-interest-bearing note for $160,000. The note is to be paid in four equal annual $40,000 payments, beginning on December 31, 2014. Current interest rates were 8%. Actuarial information for 8%, 4 periods follows: $\begin{array}{ll}1.360 & \text { Amount of 1 } \\0.735 & \text { Present value of } 1 \\4.506 & \text { Amount of anmity of } 1 \\3.312 & \text { Present value of anmity of } 1\end{array}$
Required:
Prepare the journal entries necessary on January 1, 2014, and December 31, 2014.