On July the 1st Year N, the Duran Company purchased a machine for 130 000,...
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Accounting
On July the 1st Year N, the Duran Company purchased a machine for 130 000, paid cash. The useful life is 10 years, with a residual value of 10 000. The company uses straight-line depreciation. At the same time, the company borrowed 100 000 from the bank to finance the machine. The annual interest rate of the loan is 3% and interest is paid at the end of each semester. The loan is paid back over 10 years; reimbursement of the principal takes place at the end of each semester with the same amount per period (5 000 per semester); assume there is no Income tax. What is the impact of all these operations on earnings for the year N
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