An investment will pay $15,000 at the end of the first year, $20,000 at the end of the second year, and $25,000 at the end of the third year.

Required:

Determine the present value of this investment using a 10 percent annual interest rate.

Answer: _________________

Part 2

On January 1, 2023, Himont Inc. agreed to purchase a process manufacturing facility from Harcso Corporation. Himont signed a non-interest-bearing note, agreeing to pay Harsco the entire $975,000 for the facility on December 31, 2025. The market rate of interest for this note was 7%.

Required:

A. Prepare the journal entry Himont Inc. would record on January 1, 2023 related to this purchase.

General Journal	Debit	Credit

B. Prepare the December 31, 2023, adjusting entry to record interest expense related to the note for the first year. Assume that no adjusting entries have been made during the year.

General Journal	Debit	Credit

C. Prepare the December 31, 2024, adjusting entry to record interest expense related to the note for the second year. Assume that no adjusting entries have been made during the year.

General Journal	Debit	Credit