Answered: 2001 for a value of $75,000. If the…

2001 for a value of $75,000. If the Company had barrowed money from the bank it w outd 8%. What is the value of the crane at the date of purchase? O $55,127 O $51,044 O $75,000 O $81,000

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 40BE: Accrued Interest On May 1, the Garnett Corporation wanted to purchase a $200,000 piece of equipment,...

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Question

Orion Enterprises purchased a crane on 1 January 1997 by way of a non-interest bearing note that is to mature on 31 December
2001 for a value of $75,000. If the Company had barrowed money from the bank it would have been charged an interest rate of
8%. What is the value of the crane at the date of purchase?
O $55,127
$51,044
O $75,000
O $81,000

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