[The following information applies to the questions displayed below.] On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions) ( EV of $1. PV of $1. EVA of $1. and PVA of $1) Note: Use appropriate factor(s) from the tables provided. a. Promised to pay a fixed amount of $6,600 at the end of each year for six years and a one-time payment of $116,200 at the end of the 6th year. b. Established a plant remodeling fund of $490,900 to be available at the end of Year 7. A single sum that will grow to $490.900 will be deposited on January 1 of this year. c. Agreed to pay a severance package to a discharged employee. The company will pay $75,600 at the end of the first year, $113,100 at the end of the second year, and $150,600 at the end of the third year d. Purchased a $173,000 machine on January 1 of this year for $34,600 cash. A five-year note is signed for the balance. The note will be paid in five equal year-end payments starting on December 31 of this year. 2-a. In transaction (b), what single sum amount must the company deposit on January 1 of this year? 2-b. What is the total amount of interest revenue that will be earned?

[The following information applies to the questions displayed below.] On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions) ( EV of $1. PV of $1. EVA of $1. and PVA of $1) Note: Use appropriate factor(s) from the tables provided. a. Promised to pay a fixed amount of $6,600 at the end of each year for six years and a one-time payment of $116,200 at the end of the 6th year. b. Established a plant remodeling fund of $490,900 to be available at the end of Year 7. A single sum that will grow to $490.900 will be deposited on January 1 of this year. c. Agreed to pay a severance package to a discharged employee. The company will pay $75,600 at the end of the first year, $113,100 at the end of the second year, and $150,600 at the end of the third year d. Purchased a $173,000 machine on January 1 of this year for $34,600 cash. A five-year note is signed for the balance. The note will be paid in five equal year-end payments starting on December 31 of this year. 2-a. In transaction (b), what single sum amount must the company deposit on January 1 of this year? 2-b. What is the total amount of interest revenue that will be earned?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 1PA: On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10%...

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Required information [The following information applies to the questions displayed below.] On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions): ( FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. a. Promised to pay a fixed amount of $7,500 at the end of each year for nine years and a one-time payment of $118,000 at the end of the 9th year. b. Established a plant remodeling fund of $492,250 to be available at the end of Year 10. A single sum that will grow to $492,250 will be deposited on January 1 of this year. c. Agreed to pay a severance package to a discharged employee. The company will pay $76,500 at the end of the first year, $114,000 at the end of the second year, and $151,500 at the end of the third year. d. Purchased a $177,500 machine on January 1 of this year for $35,500 cash. A five-year note is signed for the balance. The note will be paid in five equal…
Required information [The following information applies to the questions displayed below] On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions) ( EV of $1. PV of $1. EVA of $1. and PVA of $1) Note: Use appropriate factor(s) from the tables provided. a. Promised to pay a fixed amount of $6,000 at the end of each year for seven years and a one-time payment of $115,000 at the end of the 7th year. b. Established a plant remodeling fund of $490,000 to be available at the end of Year 8. A single sum that will grow to $490,000 will be deposited on January 1 of this year. c. Agreed to pay a severance package to a discharged employee. The company will pay $75,000 at the end of the first year, $112.500 at the end of the second year, and $150,000 at the end of the third year d. Purchased a $170,000 machine on January 1 of this year for $34,000 cash. A five-year note is signed for the balance. The note will be paid in five equal…
! Required information [The following information applies to the questions displayed below.] On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions): ( FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. a. Promised to pay a fixed amount of $7,500 at the end of each year for nine years and a one-time payment of $118,000 at the end of the 9th year. b. Established a plant remodeling fund of $492,250 to be available at the end of Year 10. A single sum that will grow to $492,250 will be deposited on January 1 of this year. c. Agreed to pay a severance package to a discharged employee. The company will pay $76,500 at the end of the first year, $114,000 at the end of the second year, and $151,500 at the end of the third year. d. Purchased a $177,500 machine on January 1 of this year for $35,500 cash. A five-year note is signed for the balance. The note will be paid in five equal…
! Required information [The following information applies to the questions displayed below.] On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions): ( FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. a. Promised to pay a fixed amount of $7,500 at the end of each year for nine years and a one-time payment of $118,000 at the end of the 9th year. b. Established a plant remodeling fund of $492,250 to be available at the end of Year 10. A single sum that will grow to $492,250 will be deposited on January 1 of this year. c. Agreed to pay a severance package to a discharged employee. The company will pay $76,500 at the end of the first year, $114,000 at the end of the second year, and $151,500 at the end of the third year. d. Purchased a $177,500 machine on January 1 of this year for $35,500 cash. A five-year note is signed for the balance. The note will be paid in five equal…
! Required information [The following information applies to the questions displayed below.] On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions): ( FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. a. Promised to pay a fixed amount of $7,500 at the end of each year for nine years and a one-time payment of $118,000 at the end of the 9th year. b. Established a plant remodeling fund of $492,250 to be available at the end of Year 10. A single sum that will grow to $492,250 will be deposited on January 1 of this year. c. Agreed to pay a severance package to a discharged employee. The company will pay $76,500 at the end of the first year, $114,000 at the end of the second year, and $151,500 at the end of the third year. d. Purchased a $177,500 machine on January 1 of this year for $35,500 cash. A five-year note is signed for the balance. The note will be paid in five equal…
On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions): (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) Promised to pay a fixed amount of $7,300 at the end of each year for eight years and a one-time payment of $117,600 at the end of the 8th year. Established a plant remodeling fund of $491,950 to be available at the end of Year 9. A single sum that will grow to $491,950 will be deposited on January 1 of this year. Agreed to pay a severance package to a discharged employee. The company will pay $76,300 at the end of the first year, $113,800 at the end of the second year, and $151,300 at the end of the third year. Purchased a $176,500 machine on January 1 of this year for $35,300 cash. A five-year note is signed for the balance. The note will be paid in five equal year-end payments starting on December 31 of this year. In transaction (a), determine the present value…
n January 1, Ellsworth Company completed the following transactions (use an 8% annual interest rate for all transactions) (FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Borrowed $2,200. DOD to be repaid in five years. Agreed to pay a fixed amount of $154,000 at the end of each year for five years and a one-time payment of $2,200,000 at the end of the 5th year. Established a plant remodeling fund of $1,400,000 to be available at the end of Year 10. A single sum that will grow to $1,400,000 will be deposited on January 1 of this year. Purchased a $758,000 machine on January 1 of this year and paid cash, $404,000, A four-year note is signed for the balance. The note will be paid in four equal year-end payments starting on December 31 of this year. Required: 1. In transaction (a), determine the present value of the debt. 2-a. In transaction (b), what single amount must the company deposit January 1 of this year? 2-b. In transaction…
On January 1, a company agrees to pay $13,000 in six years. If the annual interest rate is 2%, determine how much cash the company. can borrow with this agreement. (PV of $1. EV of $1. PVA of $1, and EVA of $1) Note: Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places. Future Value Table Factor Amount Borrowed
On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions): (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) Promised to pay a fixed amount of $8,000 at the end of each year for seven years and a one-time payment of $119,000 at the end of the 7th year. Established a plant remodeling fund of $493,000 to be available at the end of Year 8. A single sum that will grow to $493,000 will be deposited on January 1 of this year. Agreed to pay a severance package to a discharged employee. The company will pay $77,000 at the end of the first year, $114,500 at the end of the second year, and $152,000 at the end of the third year. Purchased a $180,000 machine on January 1 of this year for $36,000 cash. A five-year note is signed for the balance. The note will be paid in five equal year-end payments starting on December 31 of this year. 4-a. In transaction (d), what is the amount of…
Subject : Accounting On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions): (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) Borrowed $117,200 for nine years. Will pay $7,100 interest at the end of each year and repay the $117,200 at the end of the 9th year. Established a plant remodeling fund of $491,650 to be available at the end of Year 10. A single sum that will grow to $491,650 will be deposited on January 1 of this year. Agreed to pay a severance package to a discharged employee. The company will pay $76,100 at the end of the first year, $113,600 at the end of the second year, and $151,100 at the end of the third year. Purchased a $175,500 machine on January 1 of this year for $35,100 cash. A five-year note is signed for the balance. The note will be paid in five equal year-end payments starting on December 31 of this year. Required: 1. In transaction (a),…
On January 1, a company agrees to pay $14,000 in three years. If the annual interest rate is 9%, determine how much cash the company can borrow with this agreement. (PV of $1. EV of $1. PVA of $1. and FVA of $1) (Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places.) Future Value Table Factor Amount Borrowed
On January 1, a company agrees to pay $28,000 in nine years. If the annual interest rate is 3%, determine how much cash the company can borrow with this agreement. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places.)