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How much should be capitalized as cost of the machine

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Question - On February 5, 2021, Gold Company purchased a new machine on a deferred payment basis. A down payment of $100,000 and $250,000 four equal annual installments will be made every February 1, starting next February 1, 2022. The cash equivalent price of the machine is $950,000. The imputed discount rate is 6.83%. Gold also incurred $30,000 in installation costs. How much should be capitalized as cost of the machine?

a. 980,000

b. 950,000

c. 900,000

d. 1,100,000

Reference no: EM133073519

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