[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) ( EV of $1. PV of $1. EVA of $1. and PVA of $1) Note: Use appropriate factor(s) from the tables provided. a. Promised to pay a fixed amount of $6,600 at the end of each year for six years and a one-time payment of $116,200 at the end of the 6th year. b. Established a plant remodeling fund of $490,900 to be available at the end of Year 7. A single sum that will grow to $490.900 will be deposited on January 1 of this year. c. Agreed to pay a severance package to a discharged employee. The company will pay $75,600 at the end of the first year, $113,100 at the end of the second year, and $150,600 at the end of the third year d. Purchased a $173,000 machine on January 1 of this year for $34,600 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?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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[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) (
EV of $1. PV of $1. EVA of $1. and PVA of $1)
Note: Use appropriate factor(s) from the tables provided.
a: Promised to pay a fixed amount of $6,600 at the end of each year for six years and a one-time payment of $116,200
at the end of the 6th year.
b. Established a plant remodeling fund of $490,900 to be available at the end of Year 7. A single sum that will grow to
$490,900 will be deposited on January 1 of this year.
c. Agreed to pay a severance package to a discharged employee. The company will pay $75,600 at the end of the first
year, $113,100 at the end of the second year, and $150,600 at the end of the third year
d. Purchased a $173,000 machine on January 1 of this year for $34,600 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?
Complete this question by entering your answers in the tabs below.
Reg 2a
Reg 2b
In transaction (b), what single sum amount must the company deposit on January 1 of this year?
Note: Round your answer to nearest whole dollar.
Amount to deposit
Req 2b >
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) ( EV of $1. PV of $1. EVA of $1. and PVA of $1) Note: Use appropriate factor(s) from the tables provided. a: Promised to pay a fixed amount of $6,600 at the end of each year for six years and a one-time payment of $116,200 at the end of the 6th year. b. Established a plant remodeling fund of $490,900 to be available at the end of Year 7. A single sum that will grow to $490,900 will be deposited on January 1 of this year. c. Agreed to pay a severance package to a discharged employee. The company will pay $75,600 at the end of the first year, $113,100 at the end of the second year, and $150,600 at the end of the third year d. Purchased a $173,000 machine on January 1 of this year for $34,600 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? Complete this question by entering your answers in the tabs below. Reg 2a Reg 2b In transaction (b), what single sum amount must the company deposit on January 1 of this year? Note: Round your answer to nearest whole dollar. Amount to deposit Req 2b >
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