21. On January 1, Big Red Corporation paid for equipment by issuing a $300,000, 3 year note that specified 2% interest to be paid on December 31 of each year. The equipment's retail cash price was unknown, but it was determined that a reasonable interest rate was 5%. At what amount should Big Red record the equipment and the note? A. $300,000 B. $275,492 C. $324,508 D. Cannot be determined

21. On January 1, Big Red Corporation paid for equipment by issuing a $300,000, 3 year note that specified 2% interest to be paid on December 31 of each year. The equipment's retail cash price was unknown, but it was determined that a reasonable interest rate was 5%. At what amount should Big Red record the equipment and the note? A. $300,000 B. $275,492 C. $324,508 D. Cannot be determined

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 15RE: On January 1, Kilgore Inc. accepts a 20,000 non-interest-bearing, 5-year note from Dieland Company...

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