On February 5, 2020, Diamond Company purchased a new machine on a deferred payment basis. A down payment of P100,000 and P250,000 four equal annual installments will be made every February 1, starting next February 1, 2021. The cash equivalent price of the machine is P950,000. The imputed discount rate is 6.83%. Diamond also incurred P30,000 in installation costs. How much should be capitalized as cost of the machine? Group of answer choices 900,000 1,100,000 980,000 950,000
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
On February 5, 2020, Diamond Company purchased a new machine on a deferred payment basis. A down payment of P100,000 and P250,000 four equal annual installments will be made every February 1, starting next February 1, 2021. The cash equivalent price of the machine is P950,000. The imputed discount rate is 6.83%. Diamond also incurred P30,000 in installation costs.
How much should be capitalized as cost of the machine?
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