Question
On December 31, 2019, Waverly Inc purchased a new large machine to clean heavy oil from tar sands from McNally Company. As part of the
On December 31, 2019, Waverly Inc purchased a new large machine to clean heavy oil from tar sands from McNally Company. As part of the transaction, Waverly will pay $100,000 up front and also give McNally an interest-bearing note (pays 5% annually) for 900,000 that is due in 5 years. Waverlys CFO found that a similar note would actually pay 9% interest. What is the present value of the note on 12/31/2019?
**Additional questions to consider:
What would be the journal entry on 12/31/19?
What would be the journal entry on 12/31/20?
What would be the journal entry on 12/31/24?
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Managerial Accounting Ba 213 At Central Oregon Community College
Authors: Albrecht
1st Edition
1111523622, 978-1111523626
