Question
On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions): (FV of $1, PV of $1, FVA
On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions): (FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Promised to pay a fixed amount of $7,300 at the end of each year for eight years and a one-time payment of $117,600 at the end of the 8th year. Established a plant remodeling fund of $491,950 to be
1. In transaction (a), determine the present value of the debt.
2-a. In transaction (b), what single sum amount must the company deposit on January 1 of this year?
2-b. What is the total amount of interest revenue that will be earned?
3. In transaction (c), determine the present value of this obligation.
4-a. In transaction (d), what is the amount of each of the equal annual payments that will be paid on the note?
4-b. What is the total amount of interest expense that will be incurred?
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