Polo Publishers Purchased a Multi-Color Offset Press with Terms of $50,000

question 4

Multiple Choice

Polo Publishers purchased a multi-color offset press with terms of $50,000 down and a noninterest-bearing note requiring payment of $20,000 at the end of each year for five years. The interest rate implicit in the purchase contract is 11%. Polo would record the asset at:

• A)$109,618.
• B)$123,918.
• C)$130,000.
• D)$169,560.$50,000 + ($20,000 x 3.69590) = $123,918 *PVA of $1: n=5; i=11%

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Definitions:

Paid-In Capital

The capital received by a company from investors in exchange for stock, representing funds raised beyond the par value of the shares issued.

Paid-In Capital in Excess of Par

The amount of capital received from investors for stock, in excess of the par value of the shares.

Common Stock

A type of equity ownership in a corporation, with voting rights and potential dividends, representing a share in the company's profits and losses.

Date of Declaration

The date on which a company’s board of directors announces the distribution of a dividend or other important decision.