On January 1, 20x1, REEDY SLENDER Co. purchased fixtures at an installment price of $520,000. REEDY paid $40,000 cash down payment and issued a three-year noninterest bearing note of $480,000 payable in three equal annual installments starting December 31, 20x1 for the balance. The prevailing rate for the note as of January 1, 20x1 is 12%. How much is the initial cost of the fixtures? 424,293 480,000 520,000 360,000

On January 1, 20x1, REEDY SLENDER Co. purchased fixtures at an installment price of $520,000. REEDY paid $40,000 cash down payment and issued a three-year noninterest bearing note of $480,000 payable in three equal annual installments starting December 31, 20x1 for the balance. The prevailing rate for the note as of January 1, 20x1 is 12%. How much is the initial cost of the fixtures? 424,293 480,000 520,000 360,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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