amount to be recorded = present value of annuity $32000 + present value of $220000
= ($32000 x 3.605) + ($220000 x 0.567)
= $115360 + $124740
= $240100
where,
PVAF(12%, 5) = 3.605
PVF(12%, 5) = 0.567
On January 1, 2021, The Barrett Company purchased merchandise from a supplier. Payment was a noninterest-bearing...
On January 1, 2021, The Barrett Company purchased merchandise from a supplier. Payment was a noninterest-bearing note requiring five annual payments of $40,000 on each December 31 beginning on December 31, 2021, and a lump-sum payment of $300,000 on December 31, 2025. A 9% interest rate properly reflects the time value of money in this situation. ((FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the...
On January 1, 2020, The Barrett Company purchased merchandise from a supplier. Payment was a noninterest-bearing note requiring five annual payments of $31,000 on each December 31 beginning on December 31, 2021, and a lump-sum payment of $210,000 on December 31, 2025. An 11% interest rate properly reflects the time value of money in this situation. ((FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the...
On January 1, 2021, The Barrett Company purchased merchandise from a supplier. Payment was a noninterest-bearing note requiring five annual payments of $33,000 on each December 31 beginning on December 31, 2021, and a lump-sum payment of $230,000 on December 31, 2025. A 12% interest rate properly reflects the time value of money in this situation. Required: Calculate the amount at which Barrett should record the note payable and corresponding merchandise purchased on January 1, 2021. Table value are based...
Problem 5-9 (Algo) Noninterest-bearing note; annuity and lump-sum payment [LO5-3, 5-8] On January 1, 2021, The Barrett Company purchased merchandise from a supplier. Payment was a noninterest-bearing note requiring five annual payments of $21,000 on each December 31 beginning on December 31, 2021, and a lump sum payment of $110,000 on December 31, 2025. An 11% interest rate properly reflects the time value of money in this situation. ((FV of $1. PV of $1. FVA of $1. PVA of $1....
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 $4,200 on each September 30, beginning on September 30, 2024. (FV of $1, PV of $1, FVA of $1, PVA of $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.) Required: Calculate the amount at which...
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 $7,200 on each September 30, beginning on September 30, 2024. (FV of $1, PV of $1, FVA of $1, PVA of $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.) Required: Calculate the amount at which...
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 $7,600 on each September 30, beginning on September 30, 2024. (FV of $1, PV of $1, FVA of $1, PVA of $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.) Required: Calculate the amount at which...
Lincoln Company purchased merchandise from Grandville Corp. on September 30, 2018. Payment was made in the form of a noninterest-bearing note requiring Lincoln to make six annual payments of $6,400 on each September 30, beginning on September 30, 2021. (FV of $1, PV of $1, FVA of $1. PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Calculate the amount at which Lincoln should record the note payable and corresponding purchases...
On January 1, 2021, Byner Company purchased a used tractor. Byner paid $4,000 down and signed a noninterest-bearing note requiring $33,000 to be paid on December 31, 2023. The fair value of the tractor is not determinable. An interest rate of 12% properly reflects the time value of money for this type of loan agreement. The company’s fiscal year-end is December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of...
The Field Detergent Company sold merchandise to the Abel Company on June 30, 2021. Payment was made in the form of a noninterest-bearing note requiring Abel to pay $85,000 on June 30, 2023. Assume that a 10% interest rate properly reflects the time value of money in this situation. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Calculate the amount at...