Rae Company purchased a new vehicle by paying $11,900 cash on the purchase date and agreed to pay $4,900 every three months during the next five years. The first payment is due three months after the purchase date. Rae's incremental borrowing rate is 12%. The liability reported on the balance sheet as of the purchase date, after the initial $11,900 payment was made, is closest to: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.) Multiple Choice $109,900. $72,900. $84,800. $98,000.

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 5EB: Steele Corp. purchases equipment for $30,000. Regarding the purchase, Steele paid shipping of...
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Rae Company purchased a new vehicle by paying $11,900 cash on the purchase date and agreed to pay $4,900 every
three months during the next five years. The first payment is due three months after the purchase date. Rae's incremental
borrowing rate is 12%. The liability reported on the balance sheet as of the purchase date, after the initial $11,900 payment
was made, is closest to: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.)
Multiple Choice
$109,900.
$72,900.
$84,800.
$98,000.
Transcribed Image Text:Rae Company purchased a new vehicle by paying $11,900 cash on the purchase date and agreed to pay $4,900 every three months during the next five years. The first payment is due three months after the purchase date. Rae's incremental borrowing rate is 12%. The liability reported on the balance sheet as of the purchase date, after the initial $11,900 payment was made, is closest to: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.) Multiple Choice $109,900. $72,900. $84,800. $98,000.
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