Reference no: EM132468343

Question 1 - Lincoln Company purchased merchandise from Grandville Corp. on September 30, 2018. Payment was made in the form of a noninterest-bearing note requiring Lincoln to make six annual payments of $8,000 on each September 30, beginning on September 30, 2021.

Required - Calculate the amount at which Lincoln should record the note payable and corresponding purchases on September 30, 2018, assuming that an interest rate of 12% properly reflects the time value of money in this situation.

Question 2 - Lang Warehouses borrowed $178,149 from a bank and signed a note requiring 6 annual payments of $33,984 beginning one year from the date of the agreement.

Required - Determine the interest rate implicit in this agreement.

Question 3 - On September 30, 2018, the San Fillipo Corporation issued 8% stated rate bonds with a face amount of $400 million. The bonds mature on September 30, 2038 (20 years). The market rate of interest for similar bonds was 10%. Interest is paid semiannually on March 31 and September 30.

Required - Determine the price of the bonds on September 30, 2018.