Alden Trucking Company Is Replacing Part of Its Fleet of Trucks

question 122

Multiple Choice

Alden Trucking Company is replacing part of its fleet of trucks by purchasing them under a note agreement with Kenworthy on January 1, 2016. Alden financed $37,908,000, and the note agreement will require $10 million in annual payments starting on December 31, 2016 and continuing for a total of four more years (final payment December 31, 2020) . Kenworthy will charge Alden Trucking Company the market interest rate of 10% compounded annually. On January 1, 2016, Alden will record a note payable in the amount of:

• A)$37,908,000.
• B)$40,000,000.
• C)$41,698,000.
• D)$50,000,000.

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Definitions:

Breach of Contract

The violation of a contractual obligation or a failure to perform any promised act or obligation.

Intellectual Property

Legal rights that come from the intellectual activity in the industrial, scientific, literary, and artistic fields.

Patent

A legal right granted to an inventor, giving them exclusive control over the production, use, and sale of their invention for a certain period.

Bilateral Contract

A contractual agreement involving two parties where each party commits to fulfill specific obligations.