At the beginning of VHF Industries acquired a machine with a fair value of $ by issuing a twoyear, noninterest
bearing note in the face amount of $ million. The note is payable in two annual installments of $ million at the end of each year.
Required:
What is the effective rate of interest implicit in the agreement?
to Prepare the necessary journal entries.
Suppose the market value of the machine was unknown at the time of purchase, but the market rate of interest for notes of similar
risk was Prepare the journal entry to record the purchase of the machine.
Note: Use tables, Excel, or a financial calculator. FV of $ PV of $ FVA of $ PVA of $ FVAD of $ and PVAD of $
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Suppose the market value of the machine was unknown at the time of purchase, but the market rate of interest for notes of
similar risk was Prepare the journal entry to record the purchase of the machine.
Note: If no entry is required for a transactionevent select No journal entry required" in the first account field. Enter your
answers in whole dollar.
