Cooper Corporation bought a new machine and agreed to pay for it in equal annual installments of $7,200 at the end of each of the next 10 years. Assuming that a prevailing interest rate of 9% applies to this contract, how much should Fishbone record as the cost of the machine?
Cooper Corporation purchased a special tractor on December 31, 2012. The purchase agreement stipulated that Fishbone should pay $25,600 at the time of purchase and $7,700 at the end of each of the next 11 years. The tractor should be recorded on December 31, 2012, at what amount, assuming an appropriate interest rate of 11%?