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-Dominant- [34]
2 years ago
13

On January 1, a company agrees to pay $20,000 in three years. If the annual interest rate is 10%, determine how much cash the co

mpany can borrow with this agreement?
Business
1 answer:
Step2247 [10]2 years ago
5 0

Answer:

Amount borrow P = $15,026.296

Explanation:

Given:

Amount pay A = $20,000

Number of year n = 3

Rate r = 10% = 0.10

Find:

Amount borrow P

Computation:

A = P[1+r]ⁿ

20,000 = P[1+r]³

20,000 = P[1+0.10]³

20,000 = P[1.10]³

20,000 = P[1.331]

Amount borrow P = $15,026.296

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Explanation:

The journal entries are shown below:

1. Building A/c Dr $176

  Equipment A/c Dr $270

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                To Note payable A/c $38

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        To Additional paid in capital A/c - Common stock A/c $105

(Being the common stock is issued for cash)

3. Retained earnings A/c Dr $145

            To Dividend payable A/c $145

(Being the dividend is declared)

4. Short - term investment A/c Dr $7,616

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(Being the short term investment is purchased for cash)

5. No journal entry is required

6. Cash A/c Dr $4,413

           To Short - term investment A/c $4,413

(Being the short-term investment is purchased)

8 0
2 years ago
Chris Co. is considering replacing an old machine. The old machine was purchased for $100,000 and has a book value of $40,000 an
Natali5045456 [20]

Answer:

The answer is letter A.

Explanation:

No, because the relevant cost of the new machine is $10,000 more than the cost of the old machine.

3 0
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Penniston Corporation is considering a capital budgeting project that would require an initial investment of $630,000 and workin
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Answer:

Initial Invest= 630,000

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=620,218

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Explanation:

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Jayden was feeling pressured into buying a service plan for his new car. What right should Jayden exercise?
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I would go with C and A. but as i went through with that one day i would prefer C so, its C
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2 years ago
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Raymond Autobody Shop has the following accounts
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Answer and Explanation:

The creation of the chart of the account by applying the standard numbering system is presented below:

For the assets it would be started by 100

For the liabilities it would be started by 200

For the owner equity it would be started by 300

For the revenue it would be started by 400

And, for the expenses it would be started by 500

Now the creation is as follows

                                                        <u>Balance sheet </u>

<u>Assets                                       Liabilities                    Stockholder equity</u>

100  Cash                              200 Account payable    300 R. capital

110 Automotive supplied     210 unearned revenue  300 R. withdrawal

120 equipment

                                                     <u>    Income statement</u>

                                           <u> Revenue                               Expenses </u>

<u> </u>                                         400 service revenue       500 utilities expense

                                                                                   510 advertising expense

<u></u>

5 0
3 years ago
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