Joe Brinks is making plans to finance the following projects:
a. Purchase a truck for $30,000 to be repaid in equal monthly payments of $601 over the next five years. The bank has quoted an interest rate of 7.5%.
b. Purchase a piece of land, whose owner is offering to sell it to Joe for $25,000. The seller would accept five annual payments of $6,595 at 10%.
c. Sell some old equipment for $4,000. Joe is willing to accept quarterly payments of $546 for the next two years at an interest rate of 8%.
d. Purchase land and building for $50,000, with a down payment of $5,000, and semiannual payments of $3,095 for the next 10 years at an interest rate of 6.5%.

For each independent scenario, show the transactions in the accounting equation for the first two payments.

  • CreatedSeptember 01, 2014
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