On January 1, 2014, Boston Company completed the following transactions (use a 9

Question

On January 1, 2014, Boston Company completed the following transactions (use a 9 percent annual interest rate for all transactions): (FV of $1. PV of $1. FVA of $1. and PVA of $1) (Use the appropriate factor(s) from the tables provided.) Borrowed $109,000 for seven years. Will pay $9,810 interest at the end of each year and repay the $109,000 at the end of the 7th year. Established a plant addition fund of $420,000 to be available at the end of year 9. A single sum that will grow to $420,000 will be deposited on January 1, 2014. Agreed to pay a severance package to a discharged employee. The company will pay $87,000 at the end of the first year, $125,500 at the end of the second year, and $131,000 at the end of the third year. Purchased a $230,000 machine on January 1, 2014, and paid cash, $48,000. A nine-year note payable is signed for the balance. The note will be paid in nine equal year-end payments starting on December 31. 2014.

Explanation / Answer

a)

Pls post separate question for each part

Furture Value of Annuity = A * [(1+r)^n-1]/r A = 9810 r = 9% n = 7 FVOA = 90256.26 Present Value of Annuity = summation of A/(1+r)^n 49373

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