Find what is carrying value of the million face value note

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On January 1, 20x7, Gapple Corp. purchased land by issuing $1 million non-interest bearing note payable after 3 years. The company also purchased an equipment by issuing a non-interest promissory note that requires three annual installment payments of $100,000 every December 31. The interest rate charged on the notes is 10%. The present value of $1 at 10% for 3 periods is 0.75131 while the present value of an ordinary annuity of $1 at 10% for 3 periods is 2.4868.

Problem 1: What is the carrying value of the $1 million face value note at December 31, 20x7?

Problem 2: What is the carrying value of the $1 million face value note at December 31, 20x8?

Reference no: EM132673693

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