Question

Gold Co. purchased equipment from Marshall Co. on July 1. Gold paid Marshall $10,000 cash and signed a $100,000 noninterest-bearing note payable, due in three years. Gold recorded a $24,868 discount on notes payable related to this transaction. What is the acquired cost of the equipment on July 1?

Answer 1

The acquired cost of the equipment on July 1 is $85,132

Step-by-step explanation:

The computation of the acquired cost is shown below:

= Cash + Net note payable amount

= $10,000 + $75,132

= $85,132

where,

Notes payable amount equals to

= Non-interest-bearing note payable - discounts on notes payable

= $100,000 - $24,868

= $75,132

For computing the accurate answer we have to deduct the discount from the note payable amount and then added to thee cash amount