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Straight Industries purchased a large piece of equipment from Curvy Company on January 1, 2016. Straight Industries signed a note, agreeing to pay Curvy Company
Straight Industries purchased a large piece of equipment from Curvy Company on January 1, 2016. Straight Industries signed a note, agreeing to pay Curvy Company $400,000 for the equipment on December 31, 2018. The market rate o interest for similar notes was 8%. The present value of $400,000 discounted at 8% for three years was $317, 533. On January 1, 2016 Straight industries recorded the purchase with a debit to equipment for $317, 533 and a credit to notes payable for $317, 533. On Straight Industries' balance sheet for the year ended December 31, 2016, the book value of the liability for notes payable, including accrued interest would be closest to: $349, 533 $345, 026. $347, 226. $342, 936
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