Answered: FOLLOWING QUESTIONS: 1. Consider that…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 3MC: Electro Corporation bought a new machine and agreed to pay for it in equal annual installments of...

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FOLLOWING QUESTIONS:

1. Consider that the number of periods and the amount of equal installment every year is the same with the given yet the prevailing market interest rate is 10%, how much would be the present value at 01/01/2020?

A.973,684

B.1,088,815

C.1,217,105

D. 1,241,910

2. How much is the interest expense on December 31, 2020?

A. 91,121

B. 108,143

C. 123,342

D. 136,913

3. How much is the interest expense on December 31, 2021?

A. 108,143

B. 123,342

C. 136,913

D. 250,000

4. How much is the Present value at December 31, 2022?

A. 600,459

B. 759,339

C. 901,195

D. 1,027,853

5. How many periods or equal installments to pay the Note Payable?

A. 5

B. 6

C. 7

D. 8

6. How much is the annual installments?

A. 200,000

B. 225,000

C. 250,000

D. 260,000

7. On 12/31/2020, the CURRENT PORTION of the Note Payable would be?

A. 113,087

B. 126,658

C. 141,857

D. 158,879

PLEASE PROVIDE SOLUTIONS EVERY ANSWERS. THANK YOU!

On 1/1/2020, Luffy Corp purchas ed an equipment for P1,750,000 payable in equal
installments on every December 31 of each year. The imputed interest rate is 12%.
You are given the following data:
periods
10%
12%
PV of an ordinary annuity of 1
PV of an ordinary annuity of 1
PV of an ordinary annuity of 1
PV of an ordinary annuity of 1
3.79079
3.60478
4.35526
4.11141
7
4.86842
4.56876
8.
5.33493
4.96764
Present Value 1/1/2020
1,140,940
Interest Expense 12/31/2020
136,912.80
Present Value 12/31/2020
1,027,852.80

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