On January 1, 20X1, Tie Company Purchased a Machine That

question 145

Multiple Choice

On January 1, 20X1, Tie Company purchased a machine that had a sticker (list) price of $22,000. The seller agreed to allow Tie Company to pay for the machine over a three-year period at 10% interest on the unpaid balance and with equal payments of $8,444 due at the end of 20X1, 20X2, and 20X3. What is the amount that should be debited to the asset account, Machinery, on the day the contract was initiated is (rounded to the nearest dollar) ?

• A) $20,999
• B) $22,000
• C) $25,332
• D) $27,865

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Definitions:

Price Index

is a measure that examines the weighted average of prices of a basket of consumer goods and services, used to track inflation or deflation.

GDP

Gross Domestic Product is the sum of the market value of all final goods and services made within a country's borders in a given timeframe.

Gross National Product

The total value of all goods and services produced by a country's residents and businesses, regardless of where the production takes place, over a defined period.

Net Domestic Product

The total value of all goods and services produced within a country in a specific time period, minus depreciation.