Stone Company is facing several decisions regarding investing and financing activities. Address each decision independently.

On June $30,2024,$ the Stone Company purchased equipment from Paper Corporation. Stone agreed to pay $$16,000$ on the purchase date and the balance in five annual installments of $$8,000$ on each June $30$ beginning June $30,2025.$ Assuming that an interest rate of $12\%$ properly reflects the time value of money in this situation, at what amount should Stone value the equipment?

Stone needs to accumulate sufficient funds to pay a $$460,000$ debt that comes due on December $31,2029.$ The company will accumulate the funds by making five equal annual deposits to an account paying $7\%$ interest compounded annually. Determine the required annual deposit if the first deposit is made on December $31,2024.$

On January $1,2024,$ Stone leased an office building. Terms of the lease require Stone to make $20$ annual lease payments of $$126,000$ beginning on January $1,2024.$ A $12\%$ interest rate is implicit in the lease agreement. At what amount should Stone record the lease liability on January $1,2024,$ before any lease payments are made?

Answer rating: 100% (QA)

1 Valuation of Equipment Purchase Stone Company purchased equipment from Paper Corporation agreeing to pay 16000 on the purchase date and the balance ... View the full answer