How much is the initial cost of the furniture

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Reference no: EM132724335

Problem 1: Deferred settlement - with cash price equivalent 3. On January 1, 20x1, SQUAMOUS SCALY Co. purchased furniture with an installment price of ?520,000 and a cash price equivalent of ?400,000 by paying ?40,000 down payment and issuing a one-year noninterest-bearing note of ?120,000 payable in equal semi-annual installments on July 1 and December 31, 20x1. How much is the initial cost of the furniture?

a. 520,000

b. 480,000

c. 400,000

d. 360,000

Reference no: EM132724335

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