On January 1, 2011, Ontario Company sold a new machine to Canada Company for ($ 70,000). Canada
Question:
On January 1, 2011, Ontario Company sold a new machine to Canada Company for \(\$ 70,000\). Canada Company made a cash down payment of \(\$ 20,000\) and signed a \(\$ 50,000,8\) percent note for the balance due. The note is payable in three equal instalments due on December 31, 2011, 2012, and 2013. Each payment includes principal plus interest on the unpaid balance. Canada Company recorded the purchase as follows:
\section*{Required (show computations and round to the nearest dollar):}
1. What is the amount of the equal annual payments that Canada Company must make?
2. What is the total interest on the note over the three years?
Step by Step Answer:
Financial Accounting
ISBN: 9780070001497
4th Canadian Edition
Authors: Patricia A. Libby, Daniel Short, George Kanaan, Maureen Libby Gowing, Robert Libby