On January 1, 2020, Bianca Company completed the following transactions (use a 7 percent annual interest rate for all transactions): Use PV of $1 (Round time value factor to 4 decimal places. Round intermediate and final answers to the nearest whole dollar.)

a) Borrowed $133,000 for seven years. Interest of $7,800 will be paid at the end of each year and the loan of $133,000 will be paid at the end of the seventh year.

b) Established a plant addition fund of $508,000 to be available at the end of year 8. A single sum that will grow to $508,000 will be deposited on January 1, 2020.b

c) Agreed to pay a severance package to a discharged employee. The company will pay $95,000 at the end of the first year, $140,000 at the end of the second year, and $180,000 at the end of the third year.

d) Purchased a $188,000 machine on January 1, 2020 and paid cash, $43,000. A five-year note payable is signed for the balance. The note will be paid in five equal year-end payments starting on December 31, 2020.

Required:

a) In transaction (a), determine the present value of the debt.

b) In transaction (b), determine the amount that the company must deposit on January 1, 2020? (single sum to deposit)

c) In transaction (b), what is the total amount of interest revenue that will be earned?

d) In transaction (c), determine the present value of this obligation.

e) In transaction (d), determine the amount of each of the equal annual payments on the note.

f) In transaction (d), what is the total amount of interest expense that will be incurred?