TVM for class 2

TVM for class 2 - annual payment What is the journal entry...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
ABC Company purchased a new machine.   The cost of the machine was $500,000 ABC agreed to make five annual payments with the first payment one year after the purchase.  If the appropriate interesst rate is 6% per year, what is the size of the
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: annual payment? ### What is the journal entry at the purchase date? Machine 500,000 N/P 500,000 What is the entry at the time of the first payment? Interest expense 30,000 Note payable 88,698 Cash 118,698...
View Full Document

This note was uploaded on 01/31/2011 for the course MGMT 351 taught by Professor Staff during the Spring '08 term at Purdue.

Ask a homework question - tutors are online