User Account

All Pages

What is the effective rate of interest

Assignment Help Accounting Basics
Reference no: EM132855071

Question - While reading a recent issue of Medical News, Model AM 78962$204,000 zero interest loan Sylvia Brandt noticed an ad for equipment that she had been seeking for use in her business. The ad offered oxygen therapy equipment under the following terms:

Quarterly payments of $17,000 for only 3 years

The ad captured Brandt's attention, in part because she recently had been concerned that the interest charges incurred by her business were getting out of line. The price, though, was somewhat higher than prices for this model she had seen elsewhere.

Required -

How would you advise Ms. Brandt on the purchase she is considering, for each of the scenarios below?

1. Assume the market rate of interest at the time for this type of transaction is 8%. At what amount should she record the asset purchased and the liability used to purchase it?

2. Assume the market rate of interest is unknown but we know the cash price of the equipment is $185,430. What is the effective rate of interest?

Reference no: EM132855071

Questions Cloud

Quantitative research for human subjects : You would like to initiate quantitative research for human subjects that involves human rights, welfare, and ethics. How would you ensure those values are prot
Make a statement of cost of goods manufactured : Income tax provision was 30% of income before income tax. Make a statement of cost of goods manufactured for the year ended December 31, 2020
What is the standard deviation of the total return : Assume you invest 20% of your fund of $100 in Stock A and the remaining 80% in Stock B. What is the standard deviation of the total return of your portfolio?
Create a frequency distribution table : In order to improve their services for QC students, the Library asked a sample of 15 QC students how many hours they spend in the Library per semester
What is the effective rate of interest : Assume the market rate of interest is unknown but we know the cash price of the equipment is $185,430. What is the effective rate of interest
Demonstrating the entire procedure : Solve the following exercises demonstrating the entire procedure in order to obtain the partial or complete score.
Explain the benefits of a stock dividend : Explain the benefits of a stock dividend, both to the corporation issuing the dividend and to the shareholder receiving the dividend
How much is the benefit expense : The terms of the plan required Lazy to contribute 5% of the annual employee salaries to the retirement plan each year. How much is the benefit expense
What is the remedy of y : When Y sought to register the mortgage, the Registry of Deeds refused registration because it is not in a public instrument. What is the remedy of Y? Explain

Reviews

Write a Review

Accounting Basics Questions & Answers

  Compute the impact on Phelps current year profit

The estimated fair value, at the time of the lease, Compute the impact on Phelps' current year profit and loss of the operation of the leased property

  In order to properly report segment margin as a guide to

in order to properly report segment margin as a guide to long-run segment profitability and performance fixed costs

  Compute current income taxes payable at December

There are no other differences between accounting and taxable income. Compute current income taxes payable at December 31, 2021

  Schrader inc uses a budgeted factory-overhead rate to apply

schrader inc uses a budgeted factory-overhead rate to apply overhead to production. the following data are available

  Compute the amount of goodwill recognized by MM

Compute the amount of goodwill recognized by MM on its December 31 balance sheet (assume no impairments have been recognized)

  Calculate the minimum interest rate

The minimum interest rate (break-even point) at which they should consider buying the taxable bond (rounded to 2 decimal places) is

  Compute mr ts share of partnership ordinary income

Mr. T is a 10 percent general partner in KLMN. Compute Mr. T's share of partnership ordinary income and separately stated items

  The client believes is the true value of that property

For this assignment I would like you to create a case in which your client and his or her property has been assessed over and above what you and the client believes is the true value of that property.

  How did the shareholder contributed capital change

During the current year, Warren's company sold 10,000 shares, By how much, if any, did their shareholder's contributed capital change?

  Create the necessary journal entries to record the issue

Create the necessary journal entries to record the issue of the bonds for each of the bonds sold at 100 and bonds sold at 102 and bonds sold at 98.2

  Record the cash received on the discounted note

The bank's discount rate is 8%. The note was discounted without recourse and the sale criteria are met. Record the cash received on the discounted note

  Describe how you would use both data driven and model

You have been hired to develop a DSS for a car company such as Ford or GM. Describe how you would use both data driven and model driven DSS.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd