ONE Lemon Inc. bought equipment by paying $6,000 down and issuing the seller a 3-year, noninterest-bearing note payable in three annual end-of-year installments of $3,000 each, with 5% interest implicit in the purchase price. Lemon paid sales tax on the purchase of $900. Lemon also paid $750 in freight charges to have the machine delivered and another $500 to insure it while in transit. The seller charged Lemon $1,500 for setup and installation at Lemon's factory, although that invoice is still outstanding under a 90-day, interest-free payment plan the Seller provided Lemon under a promotional offer. Wages Lemon paid its plant staff to test the equipment prior to placing it into production totaled $600, and insurance on the machine during its first month of operation was $200. 

Required

Determine the balance that Lemon should report in its “Equipment" account.

Answer rating: 100% (QA)

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