Required information [The following information applies to the questions displayed below.] 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) Note: Use appropriate factor(s) from the tables provided. a. Promised to pay a fixed amount of $6,100 at the end of each year for eight years and a one-time payment of $115,200 at the end of the 8th year. b. Established a plant remodeling fund of $490,150 to be available at the end of Year 9. A single sum that will grow to $490,150 will be deposited on January 1 of this year. c. Agreed to pay a severance package to a discharged employee. The company will pay $75,100 at the end of the first year, $112,600 at the end of the second year, and $150,100 at the end of the third year. d. Purchased a $170,500 machine on January 1 of this year for $34,100 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. a. In transaction (b), what single sum amount must the company deposit on January 1 of this year? b. What is the total amount of interest revenue that will be earned?
Required information [The following information applies to the questions displayed below.] 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) Note: Use appropriate factor(s) from the tables provided. a. Promised to pay a fixed amount of $6,100 at the end of each year for eight years and a one-time payment of $115,200 at the end of the 8th year. b. Established a plant remodeling fund of $490,150 to be available at the end of Year 9. A single sum that will grow to $490,150 will be deposited on January 1 of this year. c. Agreed to pay a severance package to a discharged employee. The company will pay $75,100 at the end of the first year, $112,600 at the end of the second year, and $150,100 at the end of the third year. d. Purchased a $170,500 machine on January 1 of this year for $34,100 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. a. In transaction (b), what single sum amount must the company deposit on January 1 of this year? b. What is the total amount of interest revenue that will be earned?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Vikrambahi
![Required information
[The following information applies to the questions displayed below.]
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)
Note: Use appropriate factor(s) from the tables provided.
a. Promised to pay a fixed amount of $6,100 at the end of each year for eight years and a one-time payment of
$115,200 at the end of the 8th year.
b. Established a plant remodeling fund of $490,150 to be available at the end of Year 9. A single sum that will grow to
$490,150 will be deposited on January 1 of this year.
c. Agreed to pay a severance package to a discharged employee. The company will pay $75,100 at the end of the first
year, $112,600 at the end of the second year, and $150,100 at the end of the third year.
d. Purchased a $170,500 machine on January 1 of this year for $34,100 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.
2-a. In transaction (b), what single sum amount must the company deposit on January 1 of this year?
2-b. What is the total amount of interest revenue that will be earned?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7d6feb0c-7f70-4d41-af77-eb9ceee26757%2Fe8a890ea-4fe5-4960-b949-0143b65804d9%2Fq1vxd0b_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
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)
Note: Use appropriate factor(s) from the tables provided.
a. Promised to pay a fixed amount of $6,100 at the end of each year for eight years and a one-time payment of
$115,200 at the end of the 8th year.
b. Established a plant remodeling fund of $490,150 to be available at the end of Year 9. A single sum that will grow to
$490,150 will be deposited on January 1 of this year.
c. Agreed to pay a severance package to a discharged employee. The company will pay $75,100 at the end of the first
year, $112,600 at the end of the second year, and $150,100 at the end of the third year.
d. Purchased a $170,500 machine on January 1 of this year for $34,100 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.
2-a. In transaction (b), what single sum amount must the company deposit on January 1 of this year?
2-b. What is the total amount of interest revenue that will be earned?
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