McClelland Corporation agreed to purchase some landscaping equipment from Agri-Products for a cash price of $500,000. Before accepting delivery of the equipment, McClelland learned that the same equipment could be purchased from another dealer for $460,000. To avoid losing the sale, Agri-Products has offered McClelland a “no interest” payment plan—McClelland would pay $100,000 at delivery, $200,000 one year later, and the final $200,000 in two years. Use the following links to the present value tables to calculate answers.(PV of 1, PVAD of 1, and PVOA of 1) (Use the appropriate factor(s) from the tables provided.) Required: McClelland would usually pay 9% annual interest on a loan of this type. What is the present value of the Agri-Products loan at the delivery date? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) What journal entry would McClelland make if it accepts the deal and buys from Agri-Products? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar.)
McClelland Corporation agreed to purchase some landscaping equipment from Agri-Products for a cash price of $500,000. Before accepting delivery of the equipment, McClelland learned that the same equipment could be purchased from another dealer for $460,000. To avoid losing the sale, Agri-Products has offered McClelland a “no interest” payment plan—McClelland would pay $100,000 at delivery, $200,000 one year later, and the final $200,000 in two years. Use the following links to the present value tables to calculate answers.(PV of 1, PVAD of 1, and PVOA of 1) (Use the appropriate factor(s) from the tables provided.) Required: McClelland would usually pay 9% annual interest on a loan of this type. What is the present value of the Agri-Products loan at the delivery date? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) What journal entry would McClelland make if it accepts the deal and buys from Agri-Products? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar.)
Business Its Legal Ethical & Global Environment
10th Edition
ISBN:9781305224414
Author:JENNINGS
Publisher:JENNINGS
Chapter12: Contracts And Sales:introduction And Formation
Section: Chapter Questions
Problem 10QAP
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Question
McClelland Corporation agreed to purchase some landscaping equipment from Agri-Products for a cash price of $500,000. Before accepting delivery of the equipment, McClelland learned that the same equipment could be purchased from another dealer for $460,000. To avoid losing the sale, Agri-Products has offered McClelland a “no interest” payment plan—McClelland would pay $100,000 at delivery, $200,000 one year later, and the final $200,000 in two years. Use the following links to the present value tables to calculate answers.(PV of 1, PVAD of 1, and PVOA of 1) (Use the appropriate factor(s) from the tables provided.)
Required:
- McClelland would usually pay 9% annual interest on a loan of this type. What is the present value of the Agri-Products loan at the delivery date? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.)
- What
journal entry would McClelland make if it accepts the deal and buys from Agri-Products? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar.)
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