On September 1, 2022, Jones Manufacturing purchase equipment from CAT. Jones agreed to pay $25,000 on September 1, 2022 and the balance in six payments of $10,000. The six payments will be made every six months on March 1 and September 1. Assuming an interest rate of 8% (annual rate) reflects the time value of money, at what amount should Jones value the equipment?

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 12EA: Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank...
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On September 1, 2022, Jones Manufacturing purchase equipment from CAT. Jones agreed to pay $25,000 on September 1, 2022 and the balance in six payments of $10,000. The six payments will be made every six months on March 1 and September 1. Assuming an interest rate of 8% (annual rate) reflects the time value of money, at what amount should Jones value the equipment?  

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