On May 1, 2020, SBC INC

question 69

Multiple Choice

On May 1, 2020, SBC INC. buys a photocopier listed for $2,900. The office supply store agrees to accept a $800 down payment and a $2,100, three-year note payable at $798 per year including interest at 7%. The company's banker has suggested that an appropriate market rate is 11% per annum for loans that mature in one year or less and 14% for loans with longer maturities. At what amount will the photocopier be recorded at in the accounting records?

• A)$1,950
• B)$2,100
• C)$2,900
• D)$2,653

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Definitions:

Total Revenue

The total income received by a firm from the sale of its products or services.

Price

Price is the amount of money expected, required, or given in payment for something, reflecting its value in terms of currency.

Coefficient

A numerical or constant quantity placed before and multiplying the variable in an algebraic expression, often representing a measure of some property.