On April 1, 2028, A Company purchased three units of baking equipment by issuing a four-year,...

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On April 1, 2028, A Company purchased three units of baking equipment by issuing a four-year, non-interest bearing, P 3,200,000 note. The note is payable in annual installments of P 800,000. The first installment is due on March 31, 2029. There was no equivalent cash price for the equipment and the note had no ready market. The prevailing interest rate for a note of this type is 9%. The present value of 1 factor at 9% for 4 periods is 0.7084 and present value of ordinary annuity factor at 9% for 4 periods is 3.2397. How much is the total payment made on March 31, 2031? On April 1, 2028, A Company purchased three units of baking equipment by issuing a four-year, non-interest bearing, P 3,200,000 note. The note is payable in annual installments of P 800,000. The first installment is due on March 31, 2029. There was no equivalent cash price for the equipment and the note had no ready market. The prevailing interest rate for a note of this type is 9%. The present value of 1 factor at 9% for 4 periods is 0.7084 and present value of ordinary annuity factor at 9% for 4 periods is 3.2397. How much is the total payment made on March 31, 2031?

Answer rating: 100% (QA)

Answer PV FACTOR 1109409 32397 NOTE SHOULD BE RECORDED PV ... View the full answer