Natalie promises Brett that she will pay him $1,000 for painting her house. Brett then agrees and purchases the painting materia
2 answers:
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Answer:
$64,474.20
Explanation:
As for the information provided,
discount rate = 7.25%
First payment will be made at the end of year 1
Discounting factor =
Thus, current value of payment = = $26,107.20
Discounting factor for receipts =
Year 1 = = $28,000
0.9324 = 26,107.20
Year 2 =
Year 3 =
Therefore, value of contract today = - $26,107.20 + $26,107.20 + $30,429.0 + $34,045.20 = $64,474.20
Answer:
cash 55,110,929 debit
note payable 55,110,929 credit
--to record singing of promissory note with discounted interest--
interest expense 1.583.741,77 debit
note payable 1.583.741,77 credit
--to record accrued interest on note payable --
Explanation:
the note plus interest will be for 60 millions.
So to calcualte the isuance ofthe note we must calculate the present value of a lump sum at 12% discount rate:
Maturity 60,000,000.00
time 0.75
rate 0.12
PV 55,110,929.18
then at December 31th we solve for the accrued interest:
Principal 55,110,929.18
time 0.25 (3 months over 12 month a year)
rate 0.12000
Amount 56,694,670.95
accrued interest: 56,694,670.95 - 55,110,929.18 = 1.583.741,77