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.

a. Promised to pay a fixed amount of $7,900 at the end of each year for nine years and a one-time payment of $118,800 at the end of the 9th year.

b. Established a plant remodeling fund of $492,850 to be available at the end of Year 10. A single sum that will grow to $492,850 will be deposited on January 1 of this year.

c. Agreed to pay a severance package to a discharged employee. The company will pay $76,900 at the end of the first year, $114,400 at the end of the second year, and $151,900 at the end of the third year.

d. Purchased a $179,500 machine on January 1 of this year for $35,900 cash. A five-year note is signed for the balance. The note will be paid in five equal year-end payments starting on December 31 of this year.

P9-10 Part 1

Required:

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

Note: Round your intermediate calculations and final answer to nearest whole dollar.

P9-10 Part 2

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.

Note: Round your intermediate calculations and final answer to nearest whole dollar.

P9-10 Part 4

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?