Homework answers / question archive / On December 30, 2020, Coronado Industries purchased a machine from Wildhorse Co

On December 30, 2020, Coronado Industries purchased a machine from Wildhorse Co

Accounting

Share With

---

On December 30, 2020, Coronado Industries purchased a machine from Wildhorse Co. in exchange for a zero-interest-bearing note requiring eight payments of $200000. The first payment was made on December 30, 2020, and the others are due annually on December 30. At date of issuance, the prevailing rate of interest for this type of note was 11%. Present value factors are as follows:

 

Period

Present Value of Ordinary

Annuity of 1 at 11%

Present Value of

Annuity Due of 1 at 11%

7

 

4.712

 

5.231

 

8

 

5.146

 

5.712

 

 

On Coronado's December 31, 2020 balance sheet, the net note payable to Wildhorse is

 

 

 

 

 

$1142400.

 

 

$1029200.

 

 

$942400.

 

 

$1047101.