Answered

Find accurate and reliable answers to your questions on IDNLearn.com. Discover reliable and timely information on any topic from our network of experienced professionals.

The Holdsworth Corporation has purchased an executive jet. The company has agreed to pay $201,100 per year for the next 10 years and an additional $2,011,000 at the end of the 10th year. The seller of the jet is charging 8% annual interest.

Required:
Determine the liability that would be recorded by Jenkins.

Sagot :

Answer:

$2,280,872

Explanation:

The computation of the liability that would be recorded by Jenkins is shown below

= Payment per year × annuity factor at 8% for 10 years + extra amount × discounting factor at 8% and 10 year

= $201,100 × 6.71008 + $2,011,000 × 0.46319

= $1,349,397 + $931,475

= $2,280,872

hence, the liability is $2,280,872

We are delighted to have you as part of our community. Keep asking, answering, and sharing your insights. Together, we can create a valuable knowledge resource. Thank you for choosing IDNLearn.com. We’re dedicated to providing clear answers, so visit us again for more solutions.