1. a. Stonnel Corporation bought a new machine on January 1,2014 and agreed to pay for it in 5 equal installments of $40,000 on December 31st,2014 and December 31 of each of the next 4 years. Assuming that the prevailing rate of 8%applies to this contract, how much should Stonnel record as the cost of themachine? b. Prepare the entry that Stonnel would maketo record the purchase of the machinery if the company signed a note whereinterest was included in the face amount of the note.c. Preparethe entry or entries required for the first payment.d. How willStonnel’s note appear on the December 31st, 2014 balance sheet?Include the section of the balance sheet and the presentation, with numbers.2. Refer toquestion 1. Answer each question again,including preparation of an amortization schedule assuming that interest wasnot included in the face amount of the note.a. Cost ofthe machineb. Journalentry to record the purchasec. Entry orentries required for the first payment.d.Presentation of note on December 31, 2014 balance sheet.