On April 1, 2028, A Company purchased three units of baking equipment by issuing a four-year, non-interest bearing, P 3,200,000 note. The note is payable in annual installments of P 800,000. The first installment is due on March 31, 2029. There was no equivalent cash price for the equipment and the note had no ready market. The prevailing interest rate for a note of this type is 9%. The present value of 1 factor at 9% for 4 periods is 0.7084 and present value of ordinary annuity factor at 9% for 4 periods is 3.2397. How much is the total payment made on March 31, 2031?
On April 1, 2028, A Company purchased three units of baking equipment by issuing a four-year, non-interest bearing, P 3,200,000 note. The note is payable in annual installments of P 800,000. The first installment is due on March 31, 2029. There was no equivalent cash price for the equipment and the note had no ready market. The prevailing interest rate for a note of this type is 9%. The present value of 1 factor at 9% for 4 periods is 0.7084 and present value of ordinary annuity factor at 9% for 4 periods is 3.2397. How much is the total payment made on March 31, 2031?
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
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 24E: Notes Receivable and Income On January 1, 2019, Pitt Company sold a patent to Chatham Inc. which had...
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On April 1, 2028, A Company purchased three units of baking equipment
by issuing a four-year, non-interest bearing, P 3,200,000 note. The note is
payable in annual installments of P 800,000. The first installment is due
on March 31, 2029. There was no equivalent cash price for the
equipment and the note had no ready market. The prevailing interest rate
for a note of this type is 9%. The present value of 1 factor at 9% for 4
periods is 0.7084 and present value of ordinary annuity factor at 9% for 4
periods is 3.2397. How much is the total payment made on March 31, 2031?
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