On January 2, 2020, Gabon Corp

question 19

Multiple Choice

On January 2, 2020, Gabon Corp. purchases a new machine. The company makes a $ 2,000 cash down payment, and agrees to pay four annual instalments of $ 4,000 each, starting December 31, 2020, signing a non-interest-bearing note to this effect. The cash equivalent price of the machine is not known, but the appropriate interest rate for this type of transaction is 9% p.a. Rounding to the nearest dollar (if necessary) , Gabon should record the cost of the machine at

• A) $ 18,000.
• B) $ 16,000.
• C) $ 14,959.
• D) $ 12,959.

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