Question

CO Exercise 5-11 (Algo) Deferred annuities (LO5-8) Lincoln Company purchased merchandise from Grandville Corp. on September 30, 2021. Payment was made in the form of a noninterest-bearing note requiring Lincoln to make six annual payments of $5.600 on each September 30, beginning on September 30. 2024. (FV or $1. PV or $1. EVA of S1. PVA OR $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your final answer to nearest whole dollar amount.) Soad Required: Calculate the amount at which Lincoln should record the note payable and corresponding purchases on September 30, 2021 assuming that an interest rate of 8% properly reflects the time value of money in this situation Amount recorded

Answer 1

Date Amount paid PV of $1 PV of Amount b c=a*b 30-09-2021 $0.00 1 $0.00 30-09-2022 $0.00 0.926 $0.00 30-09-2023 $0.00 0.857 $0.00 30-09-2024 $5,600.00 0.794 $4,446.40 30-09-2025 $5,600.00 0.735 $4,116.00 30-09-2026 $5,600.00 0.681 $3,813.60 30-09-2027 $5,600.00 0.63 $3,528.00 30-09-2028 $5,600.00 0.583 $3,264.80 30-09-2029 $5,600.00 0.54 $3,024.00 Total Amount $22,192.80 The amount to be recorded at 30-09-2021 $22,192.80