Lincoln Company purchased merchandise from Grandville Corp. on September 30, 2021. Payment was made in the form of a noninterest-bearing note requiring Lincoln to make six annual payments of $4,200 on each September 30, beginning on September 30, 2024. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your final answer to nearest whole dollar amount.) Required: Calculate the amount at which Lincoln should record the note payable and corresponding purchases on September 30, 2021, assuming that an interest rate of 8% properly reflects the time value of money in this situation.
Lincoln Company purchased merchandise from Grandville Corp. on September 30, 2021. Payment was made in the form of a noninterest-bearing note requiring Lincoln to make six annual payments of $4,200 on each September 30, beginning on September 30, 2024. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your final answer to nearest whole dollar amount.) Required: Calculate the amount at which Lincoln should record the note payable and corresponding purchases on September 30, 2021, assuming that an interest rate of 8% properly reflects the time value of money in this situation.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![Exercise 5-11 (Algo) Deferred annuities [LO5-8]
Lincoln Company purchased merchandise from Grandville Corp. on September 30, 2021. Payment was made in the form of a
noninterest-bearing note requiring Lincoln to make six annual payments of $4,200 on each September 30, beginning on September
30, 2024. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.
Round your final answer to nearest whole dollar amount.)
Required:
Calculate the amount at which Lincoln should record the note payable and corresponding purchases on September 30, 2021,
assuming that an interest rate of 8% properly reflects the time value of money in this situation.
Amount recorded
17,967 X](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3e1bfd6a-3cb6-4031-858f-4ba8da8545b1%2Fc2e09a0d-0d0c-4612-9704-3ccde7cb8d04%2Fjunlilw_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 5-11 (Algo) Deferred annuities [LO5-8]
Lincoln Company purchased merchandise from Grandville Corp. on September 30, 2021. Payment was made in the form of a
noninterest-bearing note requiring Lincoln to make six annual payments of $4,200 on each September 30, beginning on September
30, 2024. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.
Round your final answer to nearest whole dollar amount.)
Required:
Calculate the amount at which Lincoln should record the note payable and corresponding purchases on September 30, 2021,
assuming that an interest rate of 8% properly reflects the time value of money in this situation.
Amount recorded
17,967 X
Expert Solution
Step 1
Let 2021 be year 0
First annual payment in year 2024 (year 3) = A3 = $4200
Total payments = 6
r = 8%
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