Calculate the company debt-to-equity ratio

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Q1. A company enters into an agreement to make 5 annual year-end payments of $3,000 each, starting one year from now. The annual interest rate is 6%. The present value of an annuity factor for 5 periods, 6% is 4.2124. What is the present value of these five payments?

Q2. Harrison Company's statement of financial position reflects total assets of $250,000 and total liabilities of $150,000. Calculate the company's debt-to-equity ratio.

Q3. On June I, Martin Company signed a $25,000, 120-day, 6% note payable to cover a past due account payable.

a. What is the total amount of interest to be paid on this note?

b. Prepare Martin Company's general journal entry to record the issuance of the note payable.

c. Prepare Martin Company's general journal entry to record the payment of the note on September 29.

Reference no: EM131190234

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