On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions): (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)Promised to pay a fixed amount of $8,000 at the end of each year for seven years and a one-time payment of $119,000 at the end of the 7th year.Established a plant remodeling fund of $493,000 to be available at the end of Year 8. A single sum that will grow to $493,000 will be deposited on January 1 of this year.Agreed to pay a severance package to a discharged employee. The company will pay $77,000 at the end of the first year, $114,500 at the end of the second year, and $152,000 at the end of the third year.Purchased a $180,000 machine on January 1 of this year for $36,000 cash. A five-year note is signed for the balance. The note will be paid in five equal year-end payments starting on December 31 of this year.4-a. In transaction (d), what is the amount of each of the equal annual payments that will be paid on the note? (Round your answer to nearest whole dollar.)4-b. What is the total amount of interest expense that will be incurred? (Round your answer to nearest whole dollar.)I am unable to get it correct. Thanks for your help. 4-a. In transaction (d), what is the amount of each of the equal annual payments that will be paid on the note? (Round your answer tonearest whole dollar.)Answer is complete but not entirely correct.Annual payments$43,114 X4-b. What is the total amount of interest expense that will be incurred? (Round your answer to nearest whole dollar.)X Answer is complete but not entirely correct.Interest expense$117,221 X

Present Value of Note = Cost of Machine - Cash Down Payment Present Value of Note = Annual Annuity…

Answered: Purchased a $180,000 machine on January…

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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On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions): (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)

Promised to pay a fixed amount of $8,000 at the end of each year for seven years and a one-time payment of $119,000 at the end of the 7th year.
Established a plant remodeling fund of $493,000 to be available at the end of Year 8. A single sum that will grow to $493,000 will be deposited on January 1 of this year.
Agreed to pay a severance package to a discharged employee. The company will pay $77,000 at the end of the first year, $114,500 at the end of the second year, and $152,000 at the end of the third year.
Purchased a $180,000 machine on January 1 of this year for $36,000 cash. A five-year note is signed for the balance. The note will be paid in five equal year-end payments starting on December 31 of this year.

4-a. In transaction (d), what is the amount of each of the equal annual payments that will be paid on the note? (Round your answer to nearest whole dollar.)

4-b. What is the total amount of interest expense that will be incurred? (Round your answer to nearest whole dollar.)

I am unable to get it correct. Thanks for your help.

4-a. In transaction (d), what is the amount of each of the equal annual payments that will be paid on the note? (Round your answer to
nearest whole dollar.)
Answer is complete but not entirely correct.
Annual payments
$
43,114 X
4-b. What is the total amount of interest expense that will be incurred? (Round your answer to nearest whole dollar.)
X Answer is complete but not entirely correct.
Interest expense
$
117,221 X

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