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Intermediate Accounting I 4 & 5. On 1/1/20, Koneh Company purchased equipment which sells for...

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Accounting

Intermediate Accounting I

4 & 5. On 1/1/20, Koneh Company purchased equipment which sells for $35,000. Not having the available cash, Koneh entered into a financing agreement to make quarterly payments for 3 years. The interest rate charged is 12%.

Present Value of Ordinary Annuity Factors (or see tables on last page of exam)

12 periods, 12%: 6.1944

3 periods, 12%: 2.4018

12 periods, 3%: 9.9540

11 periods, 3%: 9.2526

4. Assume the first payment is due 3/31/20, how much is each payment?

a) $3,516 b) $3,414 c) $5,650 d) $$14,572

5. Assume the first payment is due 1/1/20, how much is each payment?

a) $3,516 b) $3,414 c) $5,650 d) $$14,572

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