Question
Chevron Corporation purchased a truck by issuing an $80,000, four-year, non-interest-bearing note to Equality Inc. The market interest rate for obligations of this nature is
Chevron Corporation purchased a truck by issuing an $80,000, four-year, non-interest-bearing note to Equality Inc. The market interest rate for obligations of this nature is 8%.
Required
- Calculate the purchase price using any of the three methods (tables, financial calculator, or Excel). Prepare the journal entry to record the truck purchase.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To calculate the purchase price of the truck we need to find the present value of the noninterestbea...
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Step: 2
Step: 3
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Accounting Principles
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
9th Edition
978-0470317549, 9780470387085, 047031754X, 470387084, 978-0470533475
