What is the selling price

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Question - Assume your company just sold a mainframe computer. The computer originally cost $300,000 and had accumulated depreciation of $100,000 on the date of the sale. Instead of the buyer paying cash, she gave you a $400,000 noninterest-bearing note due and payable in 3 years. There is no established exchange price for the computer, and the note has no ready market. The prevailing rate of interest for a note of this type is 8%. What should your company record as a gain from the sale of this computer?

When the effective (market) rate is 8%, what is the selling price of a 10%, 5 year, $1,000 bond that pays interest semiannually (twice a year)?

When the effective (market) rate is 10%, what is the selling price of an 8%, 20 year, $1,000 bond that pays interest semiannually (twice a year)?

Reference no: EM131592405

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