On February 1, 2020, the Greece Corp., which maintains a perpetual inventory system, acquired merchandise inventory by signing a two-year, 14%, $80, 000 note payable. On this date, the market interest rate on a note of this type is 8 %. This note pays interest semiannually on February 1 and August 1 of each year. Required: a. Using the "NPV" function in Excel, compute the present value of this note. b. Record the acquisition of this merchandise inventory on February 1, 2020. c. Prepare a complete effective - interest-rate schedule for this note in Excel or on paper. d. Make the necessary August 1, 2020, entry related to this note. e. Make the necessary
On February 1, 2020, the Greece Corp., which maintains a perpetual inventory system, acquired merchandise inventory by signing a two-year, 14%, $80, 000 note payable. On this date, the market interest rate on a note of this type is 8 %. This note pays interest semiannually on February 1 and August 1 of each year. Required: a. Using the "NPV" function in Excel, compute the present value of this note. b. Record the acquisition of this merchandise inventory on February 1, 2020. c. Prepare a complete effective - interest-rate schedule for this note in Excel or on paper. d. Make the necessary August 1, 2020, entry related to this note. e. Make the necessary
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:On February 1, 2020, the Greece Corp., which maintains a perpetual inventory system, acquired
merchandise inventory by signing a two-year, 14%, $80,000 note payable. On this date, the
market interest rate on a note of this type is 8 %. This note pays interest semiannually on
February 1 and August 1 of each year. Required: a. Using the "NPV" function in Excel, compute
the present value of this note. b. Record the acquisition of this merchandise inventory on February
1, 2020. c. Prepare a complete effective - interest - rate schedule for this note in Excel or on
paper. d. Make the necessary August 1, 2020, entry related to this note. e. Make the necessary
December 31, 2020, adjusting entry (ies) related to this note. f. Make all of the necessary
February 1, 2021, entry (ies) related to this note
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