VC Purchased a Machine for Use in Operations at a Quoted

question 124

Multiple Choice

VC purchased a machine for use in operations at a quoted price of $35,120. Full payment was cash of $8,000, plus a two-year non-interest-bearing note for $27,121. The market rate of interest for this note is 8 percent. VC should record the cost of the machine as (rounded to the nearest dollar) :

• A) $23,250.
• B) $31,250.
• C) $32,950.
• D) $35,120.

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Definitions:

Merchandise Inventory

The value of a company's goods that are ready for sale to customers during an accounting period.

Increases Assets

Transactions or events that enhance the economic resources controlled by a business.

Purchase Requisition

An internal document used within an organization to request authorization for a purchase before a purchase order is issued.