A company purchased a land by signing a note with the seller, requiring $100,000 down payment, payment of $120,000 one year from purchase, and $80,000 three years from the purchase. The note is a non-interest bearing, but the going rate for similar notes is 10%. PV of 1 at 10% for 1 period is 0.91. PV of 1 at 10% for 3 periods is 0.75. How much is the cost of land acquired?

A company purchased a land by signing a note with the seller, requiring $100,000 down payment, payment of $120,000 one year from purchase, and $80,000 three years from the purchase. The note is a non-interest bearing, but the going rate for similar notes is 10%. PV of 1 at 10% for 1 period is 0.91. PV of 1 at 10% for 3 periods is 0.75. How much is the cost of land acquired?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 8PA: Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the...

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