Problem 12-12

b. 556,000
Payment (500,900*5) 2,504,500.00
Present Value of note 1,948,500.00
556,000.00

Problem 12-14
c. 3,125,000
First payment 500,000.00
Present Value Factor 6.25
3,125,000.00

Problem 12-17
1.) b. 2,175,000
Face value of note 5,000,000.00
Present Value of note(500,000*5.65) 2,825,000.00
Unearned Interest Income 2,175,000.00
2.) c. 825,000
Present Value of note 2,825,000.00
Carrying amount of equipment 2,000,000.00
Gain on sale of equipment 825,000.00
3.) b. 339,000
4.) d. 2,664,000
Date Collection Interest Income Principal
December 31,2016
December 31,2017 500,000.00 339,000.00 161,000.00
December 31,2018 500,000.00 319,680.00 180,320.00
December 31,2019 500,000.00 298,041.60 201,958.40
December 31,2020 500,000.00 273,806.59 226,193.41
December 31,2021 500,000.00 246,663.38 253,336.62
December 31,2022 500,000.00 216,262.99 283,737.01
December 31,2023 500,000.00 182,214.55 317,785.45
December 31,2024 500,000.00 144,080.29 355,919.71
December 31,2025 500,000.00 101,369.93 398,630.07
December 31,2026 500,000.00 53,534.32 446,465.68
 Problem 12-22
b. 75,820
Selling Price 758,200.00
Interest rate 0.10
75,820.00

Problem 12-23
b. 4,744,600
Notes Receivable 6,000,000.00
Principal payment
Annual payment 1,975,400.00
Interest Income(12%*6,000,000) (720,000.00) 1,255,400.00
Carrying amount 4,744,600.00

Problem 12-24
a. 640,000
Present Value(=4,000,000*.71) 2,840,000.00
Cost of building 3,800,000.00
Accumulated Depreciation 1,600,000.00 2,200,000.00
640,000.00

Present value
2,825,000.00
2,664,000.00
2,483,680.00
2,281,721.60
2,055,528.19
1,802,191.58
1,518,454.56
1,200,669.11
844,749.41
446,119.33
(346.35)