How much should johnson record as the note


Johnson corporation bought a new machine and agreed to pay for it in equal annual installments of $6,000 at the end of each of the next 5 years. Assume the prevailing interest rate for this type of transaction is 12%, Assume the present value of an ordinary annuity of $1 at 12% for five periods is 3.60. The future amount of an ordinary annuity of $1 at 12% is 6.35. The present value of $1 at 12% is 0.567. How much should Johnson record as the note payable on the balance sheet if the financial statements were prepared today?

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Accounting Basics: How much should johnson record as the note
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