Adam Baum Company borrowed $60,000 from B, A. Ware on January 1, 2021, and signed a three-year,
Question:
Adam Baum Company borrowed $60,000 from B, A. Ware on January 1, 2021, and signed a three-year, 4% installment note to be paid in three equal payments at the end of each year. The present value of an ordinary annuity of $1 for 3 periods at 4% is 2.77509.
Required
Calculate the amount of one installment payment.
Diablo Company leased a machine from Juniper Corporation on January 1, 2021. The machine has a fair value of $21,200,000. The lease agreement calls for four equal payments at the end of each year. The useful life of the machine was expected to be four years with no residual value. The appropriate interest rate for this lease is 10%.
Other information:
PV of an ordinary annuity @10% for 4 periods: 3.16987
PV of an annuity due @10% for 4 periods: 3.48685
Required
Determine the amount of each lease payment.
