Rusty Corporation Purchased a Rust-Inhibiting Machine by Paying $50,000 Cash

question 31

Multiple Choice

Rusty Corporation purchased a rust-inhibiting machine by paying $50,000 cash on the purchase date and agreeing to pay $10,000 every three months during the next two years; the first payment is due three months after the purchase date.Rusty's incremental borrowing rate is 8%.At what amount would the liability be reported at on the balance sheet as of the purchase date,after the initial $50,000 payment was made?

• A)$123,255
• B)$130,000
• C)$80,000
• D)$73,255

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