On August 1, 2020, Chapelle Corp

Accounting Apr 19, 2021

On August 1, 2020, Chapelle Corp. purchases a new machine. The company makes a $7,200 cash down payment, and agrees to pay four monthly instalments of $10,800 each, starting September 1, 2020, signing a non-interest-bearing note to this effect. The cash equivalent price of the machine is $43,200. As well, Chapelle pays installation costs of $1,200. The recorded cost of the machine should be?

Expert Solution

Computation of Recorded Cost of the Machine:

Recorded Cost of the Machinery = Cash Equivalent Price of Machine + Installation Cost

=43,200+1,200

Recorded Cost of the Machinery = $44,400

So, Recorded Cost of the Machinery is $44,400.

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