a. Buy the computers outright with cash; cost will be $60,000
b. Buy the computers and finance them with a $60,000, three-year, 10% note. The District will repay the note and pay the entire interest with a single payment of $79,860 when the note matures.
c. Buy the computers and finance them with a $60,000, three-year 10% installment note. The district will repay the note (plus interest) in three annual installments of $24,127 each.
d. Lease the computers under an operating lease, but prepay the entire rent ($60,000) in advance. (Assume it is the District’s policy to use the purchases method for reporting prepayments.)
e. Lease the computers under a capital lease, requiring three end-of-year payments of $24,127.
f. Lease the computers under an operating lease, making three end-of-year payments of $24,127.
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