On April 1, 2013, Archer Corporation purchased a new machine on a deferred payment basis....
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Accounting
On April 1, 2013, Archer Corporation purchased a new machine on a deferred payment basis. A down payment of $6,000 was made and six monthly installments of $4,000 each are to be made beginning on May 1, 2013. The cash equivalent price of the machine was $28,000. Archer incurred and paid installation costs amounting to $500. The amount to be capitalized as the cost of the machine is
a.
$28,000
b.
$22,600
c.
$28,500
d.
$24,600
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