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Broderick Company entered into the following transactions in the current year. a. On December 31, the company issued 6%, 15-year, $10,000 bonds that pay
Broderick Company entered into the following transactions in the current year. a. On December 31, the company issued 6%, 15-year, $10,000 bonds that pay cash interest semiannually on June 30 and December 31. The market rate of interest for bonds with simila risk is 7. b. The company purchased equipment on December 30. The seller agreed to accept a down payment of $10,000 and a two-year, noninterest-bearing note of $45,000 (this amount includes the principal and all interest) due in two years. Assume that the market rate of interest for this debt is 13% c. The company leased a building beginning on December 31, for 10 years that requires annual lease payments of $60,000 with the first lease payment due immediately on December 31. The market rate of interest for this lease is 6%. Required Compute the present value as of December 31, for the (a) bond, (b) noninterest-bearing note, and (c) lease liability.
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