Question
Please answer all three parts of the question : [The following information applies to the questions displayed below.] On January 1, 2014, Boston Company completed
Please answer all three parts of the question :
[The following information applies to the questions displayed below.]
On January 1, 2014, Boston Company completed the following transactions (use a 7 percent annual interest rate for all transactions) |
a. | Borrowed $107,000 for eight years. Will pay $7,490 interest at the end of each year and repay the $107,000 at the end of the 8th year. | ||||||||
b. | Established a plant addition fund of $550,000 to be available at the end of year 6. A single sum that will grow to $550,000 will be deposited on January 1, 2014. | ||||||||
c. | Agreed to pay a severance package to a discharged employee. The company will pay $74,000 at the end of the first year, $114,500 at the end of the second year, and $130,000 at the end of the third year. | ||||||||
d. | Purchased a $120,000 machine on January 1, 2014, and paid cash, $37,000. A six-year note payable is signed for the balance. The note will be paid in six equal year-end payments starting on December 31, 2014. Calculate :
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