Question: On December 1 , 2 0 2 5 , Richards Company sold some machinery to Fleming Company. The two companies entered into an installment sales

On December

1, 2025,

Richards Company sold some machinery to Fleming Company. The two companies entered into an installment sales contract at a predetermined interest rate. The contract required four equal annual payments with the first payment due on December

1, 2025,

the date of the sale. What time value of money concept is appropriate for this situation?

Future amount of an annuity of

1

for four periods

Present value of an ordinary annuity of

1

for four periods

Present value of an annuity due of

1

for four periods

Future amount of

1

for four periods

On December 1,2025, Richards Company sold some machinery to Fleming Company.

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