Joshua Company bought a new machine and agreed to pay n equal annual installment of P600,000 at the end of each of the next five years. The prevailing interest rate for this type of transaction is 12%. The present value of an ordinary annuity of 1 at 12% for five periods is 3.60. The future amount of an ordinary annuity of 1 at 12% for five periods is 6.35. The present value of 1 at 12% for five periods is 0.567. 1. What amount should be reported as note payable if financial statements were prepared today? a. 1,700,000 b. 2,160,000 c. 3,000,000 d. 3,810,000 2. What is the interest expense for the first year? a. 259,200 b. 187,200 c. 360,000 d. 457,200

Joshua Company bought a new machine and agreed to pay n equal annual installment of P600,000 at the end of each of the next five years. The prevailing interest rate for this type of transaction is 12%. The present value of an ordinary annuity of 1 at 12% for five periods is 3.60. The future amount of an ordinary annuity of 1 at 12% for five periods is 6.35. The present value of 1 at 12% for five periods is 0.567. 1. What amount should be reported as note payable if financial statements were prepared today? a. 1,700,000 b. 2,160,000 c. 3,000,000 d. 3,810,000 2. What is the interest expense for the first year? a. 259,200 b. 187,200 c. 360,000 d. 457,200

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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