Libby Company purchased equipment by paying $5,600 cash on the purchase date and agreed to pay $5,600 every six months during the next four years. The first payment is due six months after the purchase date. Libby's incremental borrowing rate is 8%. The equipment reported on the balance sheet as of the purchase date is closest to: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.)

Libby Company purchased equipment by paying $5,600 cash on the purchase date and agreed to pay $5,600 every six months during the next four years. The first payment is due six months after the purchase date. Libby's incremental borrowing rate is 8%. The equipment reported on the balance sheet as of the purchase date is closest to: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.)

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 9PB: Pickles R Us is a pickle farm located in the Northeast. The following transactions take place: A. On...

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Pickles R Us is a pickle farm located in the Northeast. The following transactions take place: A. On November 6, Pickles borrows $820,000 from a bank to cover the initial cost of expansion. Terms of the loan are payment due in six months from November 6, and annual interest rate of 3%. B. On December 12, Pickles borrows an additional $200,000 with payment due in three months from December 12, and an annual interest rate of 10%. C. Pickles pays its accounts in full on March 12, for the December 12 loan, and on May 6 for the November 6 loan. Record the journal entries to recognize the initial borrowings, and the two payments for Pickles.
Libby Company purchased equipment by paying $5,500 cash on the purchase date and agreed to pay $5,500 every six months during the next four years. The first payment is due six months after the purchase date. Libby's incremental borrowing rate is 6%. The equipment reported on the balance sheet as of the purchase date is closest to: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.) Multiple Choice $44,000. $44,108. $49,500. $38,608.
Rusty Corporation purchased a rust-inhibiting machine by paying $58,500 cash on the purchase date and agreeing to pay $11,700 every three months during the next two years. The first payment is due three months after the purchase date. Rusty's incremental borrowing rate is 12%. The liability reported on the balance sheet as of the purchase date, after the initial $58,500 payment was made, is closest to: (EV of $1. PV of $1. EVA of $1, and PVA of $1) Note: Use the appropriate factor(s) from the tables provided. Multiple Choice $82,130 $140,630 $93,600. $152,100 0
Rae Company purchaseda new vehicle by paying $10,500 cash on the purchase date and agreed to pay $3,500 every three months during the next five years. The first payment is due three months after the purchase date. Rae's incremental borrowing rate is 12%. The liability reported on the balance sheet as of the purchase date, after the initial $10,500 payment was made, is closest to: (EV of $1, PV of $1. FVA of $1, and PVA of$) (Use appropriate factor(s) from the tables provided.) Multiple Cholce $80,500. $52,071. $70,000. $62,571.
Short Company purchased land by paying $11,000 cash on the purchase date and agreed to pay $11,000 for each of the next six years beginning one-year from the purchase date. Short's incremental borrowing rate is 7%. The land reported on the balance sheet is closest to: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.) Multiple Cholce $77,000. $63.432. $66,000. $43,979.
Valley Produce received $50,000 in vendor financing at 7.8% compounded semiannually for the purchase of harvesting machinery. Equal annual payments of $9,587.89 will repay the debt in seven years, including $17,115.26 in interest. Suppose the loan permits an additional prepayment of principal on any scheduled payment date. Prepare the amortization schedule that reflects a prepayment of $10,000 with the second scheduled payment. How much interest is saved as a result of the prepayment?
Rachel Corporation purchased a building by paying $91,500 cash on the purchase date, agreeing to pay $50,300 every year for the next nine years and one payment of $101,500 ten years from the purchase date. The first payment is due one year after the purchase date. Rachel's incremental borrowing rate is 10%. (FV of $1, PV of $1, FVA of $1, and PVA of $1) The building reported on the balance sheet as of the purchase date is closest to: Note: Use the appropriate factor(s) from the tables provided.
Southtown Corporation purchased equipment and in exchange signed a two-year promissory note.The note requires Southtown to make a single payment of $100,000 in two years. Southtown hasother promissory notes that charge interest at the annual rate of 6 percent.Required:1. Compute the present value of the note, rounded to the nearest dollar, using Southtown’s typical interest rate of 6 percent.2. Show the journal entry to record the equipment purchase (round to the nearest dollar).3. Show the adjusting journal entry at the end of the first year to record interest on the note.
Harper Co. funds the acquisition of equipment on January 1, year 8 by issuing a $15,000 non-interest-bearing note payable. Beginning on December 31, year 8, the debt will be paid off in ten equal yearly payments. The market rate of interest for this sort of note is 5%. Given the facts below, how much should Harper Co. report the equipment on its December 31, year 8 balance sheet? For ten periods, the present value of $1 at 5% is 0.61391. The present value of a $1 regular annuity at 5% for ten periods is 7.72173. The current value of a $1 annuity payable in ten periods at 5% is 8.10782 8.10782
Use either the tables from Appendix E in your textbook or a financial calculator for this question. Libby Company purchased equipment by paying $5,000 cash on the purchase date and agreeing to pay $5,000 every six months during the next four years. The first payment is due six months after the purchase date. Libby's borrowing rate is 8%. The liability reported on the balance sheet as of the purchase date, after the initial $5,000 payment was made: Select the answer that is closest to (within $250 above or below) what you calculated. If an answer is more than $250 away from what you calculated, you should consider it incorrect. Group of answer choices A)$45,000 B)$33,664 C)$38,664 d)$40,000 e)None of the above
Moranex Corporation borrowed $75,000.00 at 8 % compounded annually for 15 years to buy a warehouse. Equal payments are made at the end of every year. (a) Determine the size of the annual payments. (b) Compute the interest included in payment 7. (c) Determine the principal repaid in payment period 6. (d) Construct a partial amortization schedule showing details of the first three payments, the last three payments, and totals. Comms (a) The size of the annual payment is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.).
A property can be purchased in cash by $570000 or through an equivalent plan that consists of a down payment of 10% of this amount, plus six monthly installments of $ 2,000.00 paid directly to the construction company, which works with monthly interest of 3.00%, after which the debit balance is financed by a financial agent in 20 years, at the rate of 0.80% p.m., with semiannual payments of $5,000.00 simultaneously with equal monthly installments, with no grace period. Determine the amount of each monthly installment to be paid to the financial agent.