On January 1, 20x1, REEDY SLENDER Co. purchased fixtures at an installment price of $520,000. REEDY paid $40,000 cash down payment and issued a three-year noninterest bearing note of $480,000 payable in three equal annual installments starting December 31, 20x1 for the balance. The prevailing rate for the note as of January 1, 20x1 is 12%. How much is the initial cost of the fixtures? 424,293 480,000 520,000 360,000

On January 1, 20x1, REEDY SLENDER Co. purchased fixtures at an installment price of $520,000. REEDY paid $40,000 cash down payment and issued a three-year noninterest bearing note of $480,000 payable in three equal annual installments starting December 31, 20x1 for the balance. The prevailing rate for the note as of January 1, 20x1 is 12%. How much is the initial cost of the fixtures? 424,293 480,000 520,000 360,000

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter14: Long-term Liabilities: Bonds And Notes

Section: Chapter Questions

Problem 11E

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